KUALA LUMPUR (April 2): Kossan Rubber Industries Bhd’s wholly-owned subsidiary Ideal Quality Sdn Bhd (IQ) is selling an estimated 39ha (390,397 sq metres) vacant freehold industrial land in Kuala Langat, Selangor for RM153.38 million to raise funds, which will finance the expansion of the group's rubber glove production in Bidor, Perak.

In a statement to Bursa Malaysia today, Kossan said IQ had yesterday (April 1) entered into a conditional sale and purchase agreement with the buyer Best Eternity Recycle Technology Sdn Bhd (BERT), which manufactures pulp, paper and paperboard. BERT is a wholly-owned subsidiary of Grand Fortress Global Ltd, according to Kossan.

"The board (of Kossan) is constantly evaluating the long term strategies of the gloves business of the company and its subsidiaries. This includes assessing the ways in which the company can maximise its business operations with a view to improve efficiency, reduce duplicating operating expenses and achieving synergistic savings. Towards this objective, the group had on 12/3/2018 acquired 2 pieces of leasehold industrial land, measuring about 330ha (824 acres) in Bidor, Perak, with a view to consolidate/centralise all future business expansion to this site.

"The proposed disposal provides an opportunity for Kossan to unlock and realise the value of the land, which is currently not economically utilised and the funds so raised will be utilised to hasten the development of the Bidor land. The proposed disposal appears to be an attractive offer, the acceptance is in line with the company’s objective to enhance shareholders value,” Kossan said. 

"Upon the completion of the proposed disposal, it is expected to result (in) a net gain of approximately RM 39 million. Baring unforeseen circumstances, the proposed disposal is expected to be completed by the first quarter of 2021, Kossan said.

At Bursa today, Kossan’s share price closed up six sen or 1.19% at RM5.11, for a market capitalisation of RM6.54 billion. The counter saw 2.39 million shares traded.