KUALA LUMPUR (Nov 10): Rex Industry Bhd has entered into an agreement on Friday to dispose of its land measuring 31,428 sq metres (7.8 acres) in Seberang Perai, Penang for RM41.8 million cash.

This follows the canned food manufacturer's announcement in June that it intends to decommission its production facility in Seberang Perai, located at Taman Perindustrian Bukit Minyak, Simpang Ampat, in an effort to reduce its operating costs and improve its financial position.

The group has two other production facilities in Jawa, Indonesia, and Batu Pahat.

In a bourse filing on Friday, Rex said it is selling the property to electronic and medical equipment components manufacturer SkyDorm Industries Sdn Bhd. Notably, SkyDorm Industries is indirectly owned by property developer Ewein Bhd, which is also based in Penang.

Rex expects to register a net gain of RM19.02 million from the disposal, and intends to use the bulk of the proceeds to repay its borrowings and finance its working capital.

Rex shares closed unchanged at 12 sen, giving the group a market capitalisation of RM75.63 million.