Carimin unit to buy Sejingkat galvanising plant for RM21.1 million

KUCHING (September 24): Carimin Petroleum Bhd (Carimin) is set to reactivate a galvanising and metal fabrication plant in Sejingkat here after its subsidiary agreed to buy the property for RM21.12 million in cash.

Carimin in a bourse filing on Wednesday said its 90 per cent-owned subsidiary Sri Borneo Energy Sdn Bhd (SBE) had on Sept 14 entered into a sale and purchase agreement (SPA) with Sarwaja Timur Sdn Bhd (In Liquidation) for the acquisition.

The property is a 7.246-hectare parcel of leasehold land at Lot 342 Block 8 Muara Tebas Land District, off Jalan Bako, together with the buildings on it.

These include a three-storey administrative office, a detached factory, two fabrication shops, a galvanising plant, a bundling yard, a storage yard and a dipping tank, among others.

The land is held under a 60-year lease expiring on Nov 6, 2049.

“The proposed acquisition would include the reactivation of the galvanizing and metal fabrication business, leveraging on the former plant’s track record and customer recognition.

“SBE would then expand into more industry and market segments for future growth,” it said.

SBE was incorporated on Sept 8 with Carimin holding 90 per cent and Joseph Koh Teck Seng holding the remaining 10 per cent. Its intended principal activities include manufacturing, assembling and galvanising metal products as well as marketing and trading similar products.

The group said that under the title conditions, the land may only be used as a dockyard.

Subject to obtaining all necessary approvals and complying with the title conditions, SBE proposes to use the property for manufacturing, fabrication, assembly and galvanising of metal products, along with related operational and storage activities.

The purchase price was arrived at on a willing-buyer willing-seller basis after taking into account the property’s location, land area, remaining lease tenure, existing buildings and proposed use.

About 90 per cent of the purchase consideration will be funded through bank borrowings, with the remaining 10 per cent from internally generated funds.

The acquisition is not expected to have any material immediate effect on the group’s earnings for the financial year ending June 30, 2027, but is expected to contribute positively to earnings over the longer term once SBE starts operations, it said.

Barring unforeseen circumstances, the acquisition is expected to be completed within 12 months of the SPA date if the extension is needed.