KUALA LUMPUR (April 23): Independent advisor Asia Equity Research Sdn Bhd said today the proposed acquisition by CN Asia Corp Bhd of a parcel of land from a related party for RM4 million cash is “fair and reasonable”.

To recap, CN Asia proposed to acquire a piece of land in Banting from Twinstar Acres Sdn Bhd (TASB) — a company wholly-owned by CN Asia’s major shareholder and managing director Ho Cheng San.

In a circular to CN Asia shareholders today, Asia Equity Research said the purchase consideration is fair as the deal was made on a willing buyer-willing seller basis.

“The purchase consideration is based on a price at RM36 per sq ft, which is within the range of the comparable companies transacted between RM27 per sq ft to RM36 per sq ft as ascribed by valuer [Raine & Horne International Zaki + Partners Sdn Bhd], via their report dated Nov 11, 2019,” said the adviser.

Meanwhile, the adviser also said the proposed transaction is reasonable considering the purpose of the acquisition.

The land is being acquired by CN Asia as a new site for its metal forming manufacturing facility, as the tenancy agreement for its current site in Balakong will expire in December next year. 

“The proposed acquisition site is strategic as it is located near Sepang, KLIA with presently abundance of vacant land in the vicinity, permitting future expansion,” added the adviser.

According to the circular, TASB’s original cost of investment for the leasehold land, measuring 1.14 hectares, is RM2.66 million.

Ho, who owns TASB, also controls a 38.61% stake in CN Asia. 

CN Asia shares are not traded so far today. Shares of the company, which primarily produces tanks and pressure vessels for the oil and gas and petrochemical industries, last traded at 39.5 sen, giving it a market capitalisation of RM19.72 million.