It will see its cash pile go up by RM49 million after its unit Sapura Auto Sdn Bhd sells a parcel of land to Sime Darby Bhd.

The cash proceeds will come in handy for Sapura Resources to acquire new business to replace its automotive business, namely the distribution of BMW cars that has not fared well so far.

For Sapura Resources, which has a market capitalisation of RM55 million, the divestment that will bring in RM49 million cash is a rather significant deal.

The company, which is also involved in the education industry, noted that the proposed land sale would enable it to unlock the value of the asset.

The proposed divestment is expected to result in a net gain of about RM23 million, equivalent to 16.5 sen per share.

For the financial year ended Jan 31, 2010, Sapura Resources posted a net profit of RM6.04 million or 4.33 sen per share compared with a net loss of RM4.54 million or 3.25 sen per share the year before.

As the land is charged to RHB Bank Bhd, SDMB will have to pay a property retention sum to the bank to redeem the property and free it of any encumbrances.