PETALING JAYA: Scientex Bhd
’s subsidiary Scientex Lestari Sdn Bhd has entered into a sale and purchase agreement (SPA) with Pelangi Sdn Bhd, a subsidiary of S P Setia Bhd, for the purchase of 959.72 acres of freehold land in Tebrau, Johor Baru for RM547.7mil.
In a filing with Bursa Malaysia, S P Setia said the proceeds from the acquisition deal are expected to be utilised for investment into strategic project developments as well as repayment of bank borrowings.
The property developer noted the land disposal is in line with S P Setia’s direction to optimise and rebalance its landbank whilst maintaining an efficient capital structure.
Apart from enabling the acceleration of project development and growth of S P Setia’s remaining townships in Johor, the group also expects the deal to improve its gearing level.
“This sale is testament to our commitment to improve the company’s financial health and position.
“By unlocking our land assets, we are enhancing our capital efficiency and enabling a more robust future for S P Setia,” Datuk Choong Kai Wai, president and chief executive officer of S P Setia commented.
The sale of the land will see S P Setia realise an estimated gain on disposal of RM438.3mil upon completion and lead its net assets and cash balance to increase by RM320.3mil and RM441.4mil respectively.
Choong added S P Setia remains committed to unlocking its land assets and further improving its financial standing. “We will continue to evaluate strategic opportunities to optimise our resources and execute projects that contribute to the growth of S P Setia,” he said.
Meanwhile, Scientex intends to launch a new mixed township development project on the newly acquired land with about 12,000 affordable homes to be built. The project’s gross development value is yet to be determined.
In a statement yesterday, Scientex chief executive officer Lim Peng Jin said the proposed mixed township development in Mukim Tebrau aligns with the company’s vision of constructing 50,000 affordable homes across Peninsular Malaysia by 2028.
“As at June 30, 2023, we have reached the milestone of delivering 29,000 homes which reflects our steady progress.
“This strategic expansion enables us to create a vibrant township in Mukim Tebrau and contribute to Johor’s development,” he noted in a statement yesterday.
Lim added that Scientex has six townships established to date in Johor, a state where the group started its journey in developing affordable housing.
“The upcoming addition of Mukim Tebrau in our portfolio will enhance our ability to meet local population needs. Scientex is committed to fulfilling the growing demand for affordable housing by the local communities.
“We have built a solid reputation since 1995 synonymous with promoting home affordability, and we continue to identify strategic locations throughout Malaysia to launch new township developments,” he stated.
With completion targeted for the first half of 2024, Scientex, which is also a packaging manufacturer, noted the acquisition will be funded by internally generated funds and bank borrowings.
The same land was previously proposed for acquisition by the group’s subsidiary Scientex Quatari Sdn Bhd in 2021, but was terminated in March 2023 following a lapse in the SPA with Pelangi Sdn Bhd due to non-fulfilment of conditions precedent.
Scientex’s total landbank across Johor, Melaka, Negri Sembilan, Selangor, Perak, Penang, and Kedah would expand from 6,700 acres to around 7,660 acres, upon the completion of this Tebrau land purchase.
