Blumont Group, one of the three counters in the middle of the penny stock saga in 2013, has disposed of a piece of vacant land it owns in Malaysia for RM20.0 million ($6.5 million).

 

The group&rsquo s indirect wholly-owned subsidiary, Trackplus Sdn Bhd, entered into a sale and purchase agreement (SPA) on Sept 15 with Armani Alliance Sdn Bhd. The SPA was conducted in relation to the sale of a property located at No. 8 Jalan Lompat Galah 13/36, Seksyen 13, 40100 Shah Alam, Selangor Darul Ehsan, Malaysia.

 

The property is a vacant piece of commercial land with a 99-year lease expiring on Jan 22, 2102. It has a land area of around 7,863 sqm.

 

According to the group&rsquo s latest unaudited financial statements for the 1HFY2021 ended June 30, the property&rsquo s net book value is around $4.5 million.

 

The excess of the proceeds over the property&rsquo s book value is around $2.0 million.

 

The net gain after the transaction cost and other fees is expected to come up to $1.4 million.

Firdaus & Associates, an independent valuer, performed a valuation on the property. According to the valuation certificate issued by the valuer on Sept 13, the property has a market value of RM28.0 million. The certificate is to be read in conjunction with the valuation report dated Jan 30, 2020.

 

According to Blumont, the proposed disposal will enable the group to realise cash, unlock the value in its investment and strengthen its financial position.

 

Moreover, the ownership of the property is not a core business segment of the group.

The group intends to use the proceeds to expand its existing core business areas and explore new opportunities.

 

Under the SPA, the purchaser has already paid RM0.4 million as a deposit. It will pay another RM1.6 million upon the execution of the SPA.

The balance of RM18.0 million will be paid within four months from the date of when the SPA becomes unconditional.

 

The disposal is considered a major transaction under the listing manual of the SGX-ST, and is subject to the approval of the group&rsquo s shareholders.

 

The purchaser, Armani Alliance, is a Malaysian company that installs non-electric solar energy collectors. It also operates generation facilities that produce electric energy.