KUALA LUMPUR (Aug 7): PLB Engineering Bhd is disposing of two pieces of land measuring 9,741 square metres or 2.41 acres in Penang for RM26.21 million, which will result in a one-off disposal gain of RM10.76 million.

The original cost of investment for the land was RM8.38 million.

In a bourse filing on Monday (Aug 7), PLB Engineering said its wholly-owned subsidiary PLB Land Sdn Bhd had entered into a sale and purchase agreement with Milenium Baru Sdn Bhd on Aug 7 for the disposal.

Payment of the disposal will be carried out in three tranches via a 10-10-80 percentage payout with the first 10% payment to be conducted upon execution of the agreement. And this will be followed by another 10% payment within the next three months of the agreement.

The 80% balance is required to be paid by Milenium Baru within six months from the date of the agreement, and failure to do so will result in a one-month extension with an interest rate of 5% on the unpaid balance sum calculated on a daily basis.

Milenium Baru is a unit of M Summit Corporation Sdn Bhd, which is principally involved in the business of properties development, construction of buildings and other related services.

PLB Engineering said that the disposal provides an avenue for the group to monetise and crystallise the value of its landbank while simultaneously improving its cash flow.

The group has earmarked RM15.83 million from the disposal proceeds for working capital, with the remaining RM10.38 million utilised for the redemption of bank borrowings. Both are expected to be fully utilised within three months from the completion date.

PLB Engineering stock was not traded on Monday. Its last closing was RM1.06 on Aug 2, valuing it at RM119.14 million.