KUALA LUMPUR (Dec 15): Priceworth International Bhd has proposed to acquire a firm that owns properties suitable for the expansion of the group's existing timber businesses and shipyard operation in Sandakan, Sabah.

The group said it signed an agreement on Friday to buy the firm, Melur Azim Sdn Bhd, from its owners, Chu Vui Khat and Hayati Laada, for RM46.67 million.

Priceworth has signed a separate settlement agreement with several logs suppliers which collectively owe the group RM54.58 million.

Under this deal, the log suppliers — Kinetic Journey Sdn Bhd, Ivory Bay Sdn Bhd, Easy Entity Sdn Bhd, Easy Equity Sdn Bhd and Sambungaya Sdn Bhd — will settle the RM46.67 million purchase price to Chu and Hayati, while the balance RM7.91 million of the debts will be waived by Priceworth.

The acquisition is expected to be completed within a month, Priceworth said in a bourse filing.

Priceworth said Melur Azim’s properties, located adjacent to Priceworth’s current timber complex and shipyard, are suitable for the expansion of the group's existing businesses and expansion of shipyard operation, "as Priceworth has obtained vessels building and repair licences from the Malaysian Marine Department (JLM) to undertake vessel repair and building contracts of up to 200 tonnes”.

Moreover, the properties are located in a special industrial area within an established palm oil industrial cluster in Sandakan with complete facilities and infrastructure.

"The lands form a reasonably large size of land mass, enabling industrial development to be carried out on an economic scale," said Priceworth.

Save for the writeback of the debts that were impaired in the 2019 financial year under the settlement agreement, the acquisition is not expected to have any material effect on the group's earnings, net assets, gearing and share capital for the financial period ending June 30, 2024, the group said.

Priceworth shares settled unchanged at 14 sen on Friday, giving the group a market capitalisation of RM215.51 million.