Naim to sell Muara Tuang land for RM223.38m

KUCHING: Naim Holdings Bhd will sell land in Muara Tuang district here for RM223.38 million in cash.

Its wholly-owned subsidiary Naim Land Sdn Bhd has entered into a conditional sale and purchase agreement (SPA) with Onlyee Flora Sdn Bhd (OFSB) for the disposal of all that piece of land measuring approximately 180.8 hectares situated at Sungai Sajiram/Sungai Kuap, Sungai Merdang, Samarahan.

OFSB, whose principal activities are holding companies and cultivation of oil palms, is owned by Tan Sri Yee Ming Seng, the company’s sole director and shareholder.

Naim Land acquired the land for RM23.15 million on May 29, 2008 or 16 years ago.

The land, now vacant, is a mixed zone land, and is currently charged as security for a term loan facility of Naim.

“The carrying amount of the land, based on the audited financial statements for the year ended Dec 31 2023, is about RM28.18 million

“The latest estimated market value of the land, as appraised by an independent valuer, VPC Alliance (Sarawak) Sdn Bhd, using the comparative method of valuation is approximately RM215.0 million as per its valuation certificate dated June 25 2024.

“The disposal consideration is about 4.0% higher than the market value of RM215.0 million as determined by the valuer and the board (of directors) deems the offer price of RM223.38 million as fair and reasonable,” Naim said in a filing with Bursa Malaysia.

On execution of the SPA, the purchaser paid RM22.34 million while the balance of RM201.04 million will be paid within six months from the unconditional date (i.e. when all the conditions precedent are fulfilled), where part of the balance sum shall be applied towards settlement of the existing charge and the balance thereof shall be released to Naim Land within seven days upon issuance of Form “L” by the relevant Land Registry Office accepting the registration of the “Memorandum of Transfer” of the land in favour of the purchaser. 

“The sale and purchase of the land is subject to the following conditions precedent being obtained within 6 months from the date of the SPA, namely:

(a) consent from the Superintendent of Land and Survey, Samarahan Division for the charge of the land to the purchaser’s financier as required under section 31 of the Land Code, Sarawak (Cap.81) and

(b) consent from the existing chargee for the sale and transfer of the land to the purchaser and to discharge the existing charge on the land,” said Naim.  

The proposed disposal is expected to be completed by second quarter of 2025. 

On the rationale for the proposed land sale, Naim said it forms part of the group’s on-going commitment to ensure long-term sustainability in its business operations in a tight property market dominated by substantial unsold properties as reported by the National Property Information Centre (Napic).

“From the available proceeds from the proposed disposal, the group will be able to pare down part of its borrowings and provide adequate working capital to ramp up its focus towards developing affordable homes.

“The board believes the proposed disposal would provide an opportunity to realise gains and unlock the value of investment at fair and reasonable value,” it added.

Naim said it intends to or may utilise the proceeds from the sale in the following manner over the next 15 months:

*Partial repayment of Naim group’s existing bank borrowings of about RM67.50 million;

*Working capital purpose, including estimated expense and associated tax for the proposed disposal of about RM155.88 million.”

Naim said, however, from time to time, the company will review the said proposed utilisation of the proceeds and may revise it where necessary, to support the business operations needs at the material time.

Naim said the proposed disposal is expected to contribute positively to the group’s earnings and earnings per share (EPS) for the year ending December 2025 upon its completion.

“The gearing of Naim group is expected to improve as part of the proceeds from the proposed disposal would be utilised for the proposed partial repayment of some existing bank borrowings upon receipt of the disposal consideration,” added the company.