KUALA LUMPUR (Aug 17): Puncak Niaga Holdings Bhd is selling three parcels of leasehold land in Selangor for RM306.07 million cash, to monetise its assets as part of the group's "broader strategic thrust of sustainable value creation" for its shareholders.

The group is expected to record a net loss of about RM22.4 million from the disposal, which requires the approval of shareholders as well as the state authority's approval for the transfer of the land's ownership, its bourse filing showed.

The purchase price for the plots is based on RM43 per square feet (psf) (and RM20 psf for 20,234.3 square metres of buffer zone in one of the plots), which represents a discount of RM2 psf from the fair value of the lands as at Dec 31, 2022.

Puncak Niaga and its wholly owned Puncak Niaga Management Services Sdn Bhd (PNMSSB) have entered into three conditional sale and purchase agreements (SPA) for the disposal of the plots, which have a combined size of 672,089 sq m.

The treated water supplier said two of the three parcels of land will be sold to Alpha Galaxy Sdn Bhd (AGSB), with the remaining one to Alpha Galaxy 1 Bhd (AG1B). Both AGSB and AG1B are controlled by one Abdul Hamid Bawal.

The group intends to use proceeds from the disposal to repay bank borrowings and future investments, for use as general working capital, besides paying off expenses from the disposal as well as taxes.

As at March 31, 2023, Puncak Niaga's total borrowings stood at RM1.19 billion, which comprises RM218.8 million of short-term borrowings and RM966.57 million ong-term borrowings.

The disposal is expected to be completed by the first quarter of 2028.

Puncak Niaga’s shares dipped one sen or 2.9% to close at 33.5 sen on Thursday (Aug 17), for a market capitalisation of RM148.23 million. The counter has risen 45.65% year-to-date.