© Reuters.
KUALA LUMPUR – Crescendo Corp Bhd (CCB), a Malaysian property developer, is set to divest nine parcels of freehold vacant land in Pulai, Johor for RM111 million in cash. This move follows on the heels of an earlier announcement last week where the company disclosed plans to sell seven adjoining parcels for RM117.02 million.
The land sale agreement was established between CCB’s wholly-owned subsidiary, Panoramic Industrial Development Sdn Bhd (PID), and Yu Ao Sdn Bhd (YASB). The lands in question were originally acquired over a period stretching from March 24, 2005, to February 28, 2008, at a cost of approximately RM12.91 million.
The transaction price has been set at RM125 per square foot, with the potential for an increase if a waiver is obtained concerning the Tenaga Nasional Bhd (TNB) power main switching station. The proceeds from this sale are earmarked for the further development of CCB’s remaining landbank and to bolster the working capital for both CCB Group and PID.
As of the end of July, CCB reported short-term borrowings of RM77.39 million, long-term borrowings of RM204.2 million, and cash balances totaling RM64.9 million. At the time of today’s announcement, CCB’s share price stood at RM1.40.
The completion of this disposal is expected by the third quarter of 2024 and is projected to generate a consolidated gain of approximately RM68.33 million after taxes for CCB. Importantly, this strategic divestiture will not trigger CCB’s classification under Practice Note 17 status, which is designated for financially distressed companies.
InvestingPro Insights
InvestingPro’s real-time data reveals that since the announcement of the land sale, CCB’s stock price has seen a 5% uplift. Additionally, a steady decline in the company’s long-term borrowings over the past year, and a 10% increase in cash balance in the last quarter, indicate a strengthening financial position.
Reflecting on these metrics, two InvestingPro Tips come to light. First, it’s beneficial to monitor companies like CCB that are restructuring their assets, as it could signify a strategic move to enhance profitability. Second, keeping an eye on firms with high short-term borrowings can provide insights into their financial stability. For more insightful tips like these, consider exploring InvestingPro’s comprehensive suite of investment tools, which includes an additional 100+ tips.
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