KUALA LUMPUR (April 22): TDM Bhd is disposing of a piece of leasehold land in Besut, Terengganu, to Lembaga Tabung Amanah Warisan Negeri Terengganu (LTAW) for RM12 million.

In a filing with Bursa Malaysia today, TDM said it entered into a sale and purchase agreement with LTAW today for the disposal. Proceeds from the disposal wil be used as working capital.

Under the agreement, a 25% deposit of RM3 million is to be paid to TDM upon execution of the sale and purchase agreement while the 75% balance is to be paid to the company's solicitors as stakeholder upon completion of the land transfer to LTAW.

Since the land is conditioned only for the purpose of tourism, TDM said its disposal is reasonable in order to capture the cash value of the land, as the company is principally involved in plantation and healthcare industry.  

Furthermore, it said the deal will be able to turn a profit, enhance its working capital and provide cash flow to the company.   

The proposed disposal is regarded as a related transaction as its non-independent and non-executive director Datuk A. Rahman Yahya, is also LTAW's director. "Notwithstanding the common directorships held by Datuk A. Rahman Yahya in TDM and LTAW, Datuk A. Rahman Yahya does not have any equity interests in TDM," the filing read.

The transaction is expected to be completed within six months.

TDM shares rose 1.5 sen or 8.33% today to settle at 19.5 sen, giving the group a market capitalisation of RM328.12 million.