KUALA LUMPUR (Aug 5): Property developer Talam Transform Bhd (KL:TALAMT) said it plans to dispose of a 27.72-acre piece of land in Sepang to a unit of IJM Corp Bhd (KL:IJM) as partial debt repayment.

In a bourse filing, Talam Transform said its wholly owned subsidiary Talam Leisure Development Sdn Bhd (TLDSB) has agreed to sell the land to Ever Mark (M) Sdn Bhd (EMSB), a wholly owned subsidiary of IJM Properties Sdn Bhd. IJM Properties is a wholly owned unit of IJM Corp.

The deal involves the setting off of RM66 million of indebtedness, and a RM18 million interest waiver on the debt owed by Talam Transform to IJM Properties.

A variable entitlement of 30% of the profit after tax from EMSB’s project development will be payable to TLDSB, whereby a RM10 million sum will be payable to TLDSB over a 24-month installment period, commencing from the first sales launch of the project, said Talam Transform.

The land disposal, which is subject to approval from Talam Tranform's shareholders and relevant authorities, is expected to be completed in nine to 12 months, the loss-making group said.

The deal is expected to generate a net profit of RM30.26 million for Talam Transform, the group said.

In 2024, Talam Transform had successfully negotiated with IJM Group to extend the repayment of RM235.76 million owed to IJM by two years to May 2026, Talam Transform’s 2024 annual report showed.

Talam Transform saw its borrowings increase 60.45% to RM50.78 million as at March 31, 2024 (FY2024), from RM31.65 million FY2023. This translated to a net gearing of 0.18 times in FY2024, compared to 0.09 times in FY2023.

The group has been in the red over the last four years. It reported a net profit of RM2.58 million in FY2020, before slipping into the red with net losses of RM30.48 million in FY2021 and RM4.84 million in FY2022, respectively.

The net loss spiked 81% to RM27.89 million in FY2024, from RM15.41 million in FY2023, mainly due to an increase in its administrative expenses to RM25.93 million from RM15.57 million in FY2023. Finance costs of RM20.18 million also dragged its profitability in FY2024.

Talam Transofrm’s share price closed unchanged at 2.5 sen, bringing the group a market capitalisation of RM107 million.