PETALING JAYA: Eco World Development Group Bhd (EcoWorld Malaysia) is selling freehold industrial land measuring 138.532 acres at Eco Business Park I in Iskandar Malaysia to Microsoft Payments (Malaysia) Sdn Bhd for RM693.96mil.
In a filing with Bursa Malaysia, EcoWorld Malaysia said part of the disposal price will be used to complete the remaining main infrastructure development on the land and to defray associated expenses for the proposed land sale, which are expected to be incurred within 24 months from the date of the sale and purchase agreement.
“At this juncture, the quantum for each of these utilisations has yet to be finalised.”
It added that the balance will be used as working capital.
“Timing of utilisation cannot be ascertained at this juncture as it will depend on the actual amount available and actual working capital requirements at that point of time.
“Any part of the disposal price which has yet to be utilised will be placed in deposits with financial institutions or short-term money market instruments. Interest derived from the deposits placed or any gain arising from short-term money market instruments will be used as working capital of the group.”
Additionally, EcoWorld Malaysia said the proposed land sale, once it is completed, is expected to enhance the net assets and gearing of the group in view of the surplus cash after setting aside cash required to complete the remaining infrastructure works and to defray associated expenses.
“The quantum of the surplus cash cannot be determined at this juncture as it will depend on, amongst others, actual development costs incurred for the development of the Land at the time of completion.”
Commenting on the land deal, EcoWorld Malaysia said the industrial component of its business has been growing very rapidly over the past four years with annual sales having exceeded RM1bil in financial year 2023 (FY23) and FY24 from this segment alone.
“This is largely attributed to the comprehensive three-pronged strategy adopted by the group, which has given it a wide range of products across two sizeable industrial revenue pillars, thus enabling it to serve local small and medium enterprises, larger industrialists and renowned international players.
“The sale of industrial land with infrastructure to global multinationals, in both traditional manufacturing as well as the high-tech and digital space, is an integral part of the group’s strategy to grow its Eco Business Park.”
EcoWorld Malaysia said the proposed land sale at Eco Business Park I marks the second strategic land deal entered into between the company and the buyer for their development and operation of a data centre in Iskandar Malaysia.
“It demonstrates the southern state and Malaysia’s continued attractiveness as a hub for hyperscale data centre operators and is also testament to the suitability of the group’s industrial parks as ideal sites for such high-tech operations.”
The company said the completion of sale will add to the group’s already substantial cash reserves (including short-term funds) which stood at RM1.36bil as at Oct 31, 2024.
“Accordingly, EcoWorld Malaysia is in a very good position to not only expand its landbank but to also pursue strategic opportunities to grow its portfolio of recurring income assets in the commercial and / or industrial sector.
“This is with the aim of establishing a solid foundation of new and sizeable recurring income sources to anchor future cashflow and earnings, thus complementing the group’s trading revenue generation from its sale of development properties.”–THE STAR
