SALCON Bhd’s indirect unit, Nusantara Megajuta Sdn Bhd, has entered into a joint venture agreement (JVA) with Exsim Kebun Teh Sdn Bhd to develop serviced apartments and retail units on two parcels of leasehold land in Johor Bahru, Johor.

Salcon told the bourse today that Exsim will pay RM140 million as landowner’s entitlement to Salcon which in turn will use 20% of the proceeds to repay a bank loan, with the rest to be used as working capital.

Salcon said the land, which is currently charged to HSBC Bank Malaysia Bhd, has a net book value of RM108.83 million based on its latest audited financial statements as at Dec 31, 2021.

“The joint venture would allow Salcon to unlock the value of the development lands by tapping on the skills, track record and experience of the developer who provides property development services ranging from the inception to the completion of a portfolio for commercial and industrial projects.

“This would enable the Salcon group to have greater financial flexibility to pursue future potential business opportunities 

“The joint venture is expected to be completed within the second quarter of 2028 and will contribute positively to the earnings and the earnings per share of the Salcon Group for the financial year ending Dec 31, 2024 onwards,” it said.

The project is expected to realise a net gain attributable to owners of the company of around RM31.17 million.

Salcon shares gained half a sen or 2.56% at 20 sen, for a market capitalisation of RM202.48 million. – TMR / pic TMR File