S P Setia Berhad (“S P Setia”) announced that it has disposed of freehold land measuring approximately 959.72 acres to Scientex Lestari Sdn Bhd ("Scientex Lestari") for a cash consideration of RM547.65 million. The sale was executed through S P Setia's indirect wholly-owned subsidiary, Pelangi Sdn Bhd ("PSB"), following a conditional sale and purchase agreement entered today.

Located in Mukim of Tebrau, District of Johor Bahru, the said land holds strong value due to its prime location along the Senai - Desaru Expressway ("SDE"). Positioned approximately 18 kilometers east of the Senai International Airport and 28 kilometers north of Johor Bahru city centre, the lands provide easy access to major transportation routes. Currently, access to the land from Johor Bahru city centre is via the Pasir Gudang Highway or Tebrau Highway leading to Jalan Kota Tinggi and thereafter to the SDE.

This strategic transaction signifies an important step forward for S P Setia. 

Datuk Choong Kai Wai, President & CEO of S P Setia Berhad, commented, "This sale is a testament to our commitment to improving the company's financial health and position. By unlocking our land assets, we are enhancing our capital efficiency and enabling a more robust future for S P Setia."

Situated in a thriving neighborhood, the land is surrounded by various existing and on-going residential developments such as Taman Bestari Indah, Taman Bukit Tiram, Taman Pelangi Indah, Austin Duta, Eco Spring, Eco Summer, Taman Puteri Wangsa, Taman Seri Austin, Bandar Jaya Putra, Taman Setia Indah, Bandar Dato’ Onn, Taman Bukit Tiram, and Felda Ulu Tebrau.

According to Datuk Choong Kai Wai, President & CEO of S P Setia Berhad, "The sale of this land is in line with the Group’s direction to optimise and rebalance its land bank whilst maintaining an efficient capital structure. The land in mentioned relates to the same initially agreed to be sold to Scientex Quatari Sdn Bhd, a wholly-owned subsidiary of Scientex Berhad as announced on 7 May 2021 on the Main Market of Bursa Malaysia Securities Berhad. However, due to non-fulfilment of a condition precedent, specifically in relation to the approval from the EPU, Ministry of Economy, the transaction was terminated in March 2023."

The sale of this land will not have any material effect on the earnings per share, net assets per share, save for the Group realising an estimated gain on disposal of approximately RM438.3 million upon completion. The net assets and cash balance of the Group shall increase by approximately RM320.3 million and RM441.4 million, respectively, immediately after the completion of the sale.

In conclusion, S P Setia remains committed to unlocking its land assets and further improving its financial standing. Datuk Choong Kai Wai adds, "We will continue to evaluate strategic opportunities to optimise our resources and execute projects that contribute to the growth of S P Setia." 

(10 July 2023)