Kuala  Lumpur,  29  September  2021  –  Bursa Malaysia’s ACE Market-listed Kanger International Berhad’s (“Kanger”, “the Group” or “the Company”) via its wholly-owned subsidiary Ganzhou Kanger Industrial Co Ltd today announced that  it  had  entered  into  a  letter  of  intent  (“LOI”)  with  Huizhou  ZhongNeng Construction  Ecological  Resources  Technology  Co  Ltd,  a  subsidiary  of  China Energy  Construction  Co  Ltd  (“China  Energy  Construction”)  to  dispose  two commercial buildings and land located in Ganzhou City, China for approximately China  Renminbi  RMB400.0  million  (equivalent  to  Malaysia  Ringgit  RM258.9 million). 

Listed on the Hong Kong Stock Exchange, China Energy Construction is a Chinese state-owned  energy  conglomerate  involved  in  the  design  and  construction  of power projects as well as manufacture of power industry related equipment. As one of the leading power industry players  globally,  China Energy Construction has  approximately  160,000  employees  and  has  been  involved  in  major  power projects globally.

The two commercial buildings comprise a 19-storey hotel and a purpose-built 6-storey  one-stop  “AutoCity”  located  at  Ganzhou  Economic  and  Technological Development  Zone,  Ganzhou  City,  Jiangxi  Province  in  China.  Based  on  an independent  valuation  report,  the  assessed  value  of  these  two  properties  is RMB295.4 million (RM190.8 million).

Kanger’s Executive Director, Mr. Steven Kuah Choon Ching (柯 俊 敬) said, “We are delighted that a large and reputable organisation such as China Energy Construction  has  expressed  interest  in  purchasing  our  properties  in  Ganzhou City. Upon disposal of the properties, we will be able to realise significant capital gains as well as raise a sizable amount of cash flow”. “As the Group pivots into the construction business segment, the disposal of the properties  is  timely  as  it  enlarges  our  war  chest  to  fund  the  expansion  of  our construction division. The proceeds raised will be used as working capital for our existing 7 construction projects totalling approximately RM1.0 billion in orderbook. Furthermore, with a stronger balance sheet, we would be able to take on larger scale construction projects, thus enhancing our competitive advantage when tendering for new projects”.

“Moving forward, we are eyeing to become a formidable construction player by leveraging on our business network and proactively participating in construction tenders. We believe the ongoing transformation journey will augur well for the Group  and  increase our shareholders’ value in the coming years.  In  the  near term, we expect a healthy recovery in our financial performance stemming from the resumption and recovery of economic activities,” he concluded.  Upon  conversion  of  the  land  parcel  from  industrial  to  commercial  status,  both parties will enter into a definitive agreement whereby the final purchase  price will be determined based on the market value of commercial land in the same area which is estimated to be RMB400 million (RM258.9 million).