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

In a statement to Bursa Malaysia yesterday, Kossan said IQ had on April 1 inked a conditional sale and purchase agreement with the buyer,  Best Eternity Recycle Technology Sdn Bhd, which manufactures pulp, paper and paperboard.

"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, and the acceptance is in line with the company’s objective to enhance shareholders value,” Kossan said.

Kossan’s Bidor plot comprises two pieces of leasehold industrial land measuring 330ha (824 acres), which it bought in 2018 to consolidate and centralise all its future expansions to this site.

The disposal, expected to be completed by the first quarter of 2021, is expected to give Kossan a net gain of about RM39 million.

Kossan’s share price closed six sen or 1.19% higher at RM5.11 yesterday, after 2.39 million shares were done, for a market capitalisation of RM6.54 billion.