KUALA LUMPUR (Dec 15): Kamdar Bhd is disposing of a property in Bayan Lepas, Penang for RM12.3 million to repay its bank borrowings.

The group said it is selling the land with a four-storey detached factory on it to GSH Precision Technology Sdn Bhd.

The net book value of the asset is RM3.45 million while the expected profit from the disposal is RM8.85 million, Kamdar said in a bourse filing.

It added that it will use part of the sale proceeds to settle the group’s outstanding loan of RM10 million.

Kamdar said the property was rented to its unit Kesar Sdn Bhd for wholesale business, but the business has been declining over the years and there was less need for warehousing space.

“The management decided that it was in the best interest of the company to liquidate the asset and settle some loans and reduce the gearing and interest burden on the group overall,” it said.

Kamdar’s shares closed unchanged at 19 sen, giving the group a market capitalisation of RM36.72 million.