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MeGroup’s subsidiary acquires Malaysian property for $4.7 mil

Felicia Tan
·2-min read

MeGroup says it intends to expand its existing manufacturing facilities at the property.

MeGroup’s SJY subsidiary, Menang Nusantara Sdn. Bhd. (MNSB), has acquired a property at Lot 16, Jalan 3, Kawasan Perusahaan Cheras Jaya, 43200 Balakong, Selangor Darul Ehsan for RM16.2 million ($4.7 million).

A sale and purchase agreement (SPA) was entered into between MNSB and the vendor, Ngai Ming Plastic Industries (M) Sdn. Bhd., on Sept 6.

The 99-year leasehold property is on industrial land that measures some 4,868 sqm. The lease will expire on Dec 30, 2098. The buildings on the property include a single storey detached factory with a three-storey office annexed with an estimated built-up area of approximately 3,700 sqm.

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Based on the property's built-up area, the consideration values the property at RM4,378 psm. The group did not commission a valuation on the property.

In connection with the entry into the SPA, MNSB has entered into a tenancy agreement with Ngai Ming Plastic Industries under which MNSB will be granted a tenancy of the property for a period of one year at a rental of RM80,000 per month. The tenancy will end upon the completion of the acquisition of the property, following which, MNSB will be the property’s legal and beneficial owner.

MeGroup says it intends to expand its existing manufacturing facilities at the property. It also intends to relocate some of its management, sales, finance and HR operations that are currently located at its main manufacturing plant at Balakong, Selangor, Malaysia, to the new premises.

The group has secured a bank financing facility of RM36.02 million for the expansion of its manufacturing facilities. The proposed acquisition will be fully funded by the facility and with the group’s internal resources. The facility will be secured by way of a charge over the property and a corporate guarantee by the group.

At present, the group currently operates a manufacturing plant, an assembly plant, a thermobonded felt plant and a warehouse all located at Balakong, Selangor, Malaysia. In addition, the group operates an assembly plant in Kulim District, Kedah, Malaysia.

Shares in MeGroup closed flat at 11 cents on Sept 6.

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