KUALA LUMPUR (Dec 7): Chin Hin Group Property Bhd is acquiring a freehold plot in Penang measuring about 1.218 acres for RM40 million from Ivory Properties Group Bhd for RM40 million to build a multi-storey serviced residence.

As part of the deal, Chin Hin Group will award construction works of the development to a member company of the Ivory group as the turkey builder.

Chin Hin said it has on Friday signed a binding term sheet with Ivory Properties' wholly-owned Ivory Gleneary Sdn Bhd (IGSB) for the proposed land acquisition.  

Subsequently, either Chin Hin Group Property or a subsidiary that shall be incorporated as a special purpose vehicle (SPV) will ink a sale and purchase agreement with IGSB within 60 days from the date of the term sheet for the acquisition. 

The SPV will then ink an exclusive rights agreement with the designated entity within Ivory’s group of companies, to whom it will grant an irrevocable exclusive right to take up a 20% stake in the SPV. 

The SPV will then award the development's construction works to the designated Ivory group member company. 

The purchase price is expected to be funded via a combination of internal funds and bank borrowings.

At Friday's market close, Chin Hin Group Property's share price settled unchanged at 89 sen, giving the group a market value of RM490 million. Year to date, the stock has fallen 22%.

Ivory's share price also closed unchanged at 7.5 sen for a market capitalisation of RM37 million.