KUALA LUMPUR (Sept 13): Signature International Bhd plans to sell three contiguous plots of vacant freehold land in Bandar Baru Enstek, Negeri Sembilan for RM54.6 million, cash.

The plots, which it bought in 2014 to build a new manufacturing facility — a plan which never materialised — are being sold to Ace Logistic Sdn Bhd, whose directors include the executive chairman of Chin Hin Group Bhd, Datuk Seri Chiau Beng Teik, Datin Seri Wong Mee Leng and Chiau Haw Choon. Chin Hin Group is the largest shareholder of Signature International.

As such, the deal is deemed a related party transaction due to the common directorships and major shareholdings in Chin Hin Group, Signature International, and Ace Logistic.

In a Bursa Malaysia filing today, the kitchen cabinet manufacturer said its wholly-owned Signature Realty Sdn Bhd has entered into three conditional sale and purchase agreements with Ace Logistic for the proposed disposal of the plots, which measure a collective 1.25 million square feet.

The selling price, at RM43.50 per square foot, was arrived at on a willing buyer-willing seller basis after taking into account the market value of Bandar Baru Enstek lands and the total net book value of the land of RM40.94 million, said Signature International.

It also said the plots are not being used for any of the group's businesses, so selling the non-core assets will provide an avenue to the group to realise its investments in them at market value, and raise cash that can be used for the group's business operations.

Of the proceeds, it plans to use RM34.1 million to repay its bank borrowings and another RM18.9 million to purchase raw materials for its existing and new projects. It also expects to realise an estimated disposal gain of RM13.6 million from the sale.

Shares in Signature International slipped one sen or 1.07% to 92.5 sen, valuing the company at RM271.65 million. The stock has risen by 65.18% from 37 sen reported in early January.