K-Star to sell land in China for RM14m

PETALING JAYA: K-Star Sports Limited's wholly-owned subsidiary company, Fujian Dixing is disposing of a piece of vacant industrial land measuring 26,973 square metres in Fujian Province, China for RMB22.5 million (RM14.28 million) cash.
The disposal will result in an estimated loss on disposal of RMB1.64 million (RM1.04 million) to the group based on the audited net book value of the land as at Dec 31, 2016.
Fujian Dixing is principally engaged in the design, manufacture and distribution of sports footwear, sports apparel and accessories under K-Star's own proprietary brands.
Fujian Dixing had entered into a sale and purchase agreement (SPA) with purchaser Ding Jindian for the exercise.
The proceed from the disposal is expected to be fully utilised by K-Star and its subsidiary companies for repayment of borrowings and working capital.
"The disposal is part of the group's streamlining exercise to improve the assets utilisation and overall financial position of the group. The board is of the opinion that the disposal will improve the group's overall financial condition as the proceed from the disposal is to be utilised for repayment of borrowings and general working capital, together with the the expected nominal finance costs saving of RMB2.64 million per year," K-Star said in a stock exchange filing.
The disposal is expected to be completed by the third quarter of 2017. K-Star closed 5.88% lower at 8 sen, with 762,200 shares traded.