Melati Ehsan sells land to Kimlun for RM68 million

PETALING JAYA: Melati Ehsan Holdings Bhd (MEHB) is disposing of 47 vacant detached lots and 30 leasehold building lots in Shah Alam to Kimlun Corp Bhd for RM68.41 million cash.
Melati Ehsan's wholly owned subsidiary Bayu Melati Sdn Bhd has entered into a sale and purchase agreement with Kimlun's wholly owned subsidiary Kimlun Land Sdn Bhd for the exercise.
Melati Ehsan said proceeds derived from the proposed disposal will be utilised as working capital and the estimated gain from the exercise is RM1.15 million.
"The proposed disposal will enable the group to unlock capital resources from being tied up as long term assets and realise the value of the property at a fair market value whilst enhancing the group's liquidity and strengthening its financial position," it noted.
Meanwhile, Kimlun said the proposed acquisition provides an opportunity for the group to increase the size of its land bank in strategic location in order to enhance its future revenue and earnings.
It plans to carry out some enhancements on the 30 detached houses, and build bungalow units on the 47 vacant lots after the completion of the exercise.
Given the strategic location of the properties, Kimlun is confident that the housing development to be carried out on the properties will be well received by the general public.
Melati Ehsan's share price fell 1.9% to close at 76 sen, while Kimlun declined 0.4% to RM2.25.