KUALA LUMPUR (Oct 5): Jasa Kita Bhd is disposing of a parcel of land for cash consideration of RM43.08 million in a related party transaction.

The leasehold piece of industrial land, measuring 14,294 square meters, is located within the PKNS Setapak industrial area in Kuala Lumpur.

In a bourse filing, Jasa Kita said the group has entered into a sale and purchase agreement with Urban Reach Sdn Bhd (URSB), a 55% wholly-owned subsidiary of FCW Holdings Bhd to dispose of a parcel of the land.

URSB’s principal activity is investment holdings as well as business of investment, leasing and management of properties and property development. Apart from FCW holding a 55% stake in the company, the remaining 45% is held by IJM Land Bhd.

Its executive chairman and major shareholder Tan Sri Tan Hua Choon is deemed interested in the proposed disposal as he is also the non-executive chairman and major shareholder of FCW.

Hua Choon is the father of Datuk Sri Tan Han Chuan and Datin Tan Ching Ching.  

Hua Choon holds a direct interest of 31.89% stake and an indirect interest of 8.44% stake via his son in Jasa Kita, while in FCW, he holds a direct interest of 11.15% stake and an indirect interest of 19.46% stake in the company.

Han Chuan is also a substantial shareholder in FCW, holding an 8.43% direct interest in FCW,  while Ching Ching holds a 5.2% stake in the company.  

Han Chuan’s spouse Puan Sri Poo Choo @ Ong Poo Choi owns a 5.83% stake in FCW.

Jasa Kita is expected to record a disposal gain of RM37.54 million from the land disposal.  

Jasa Kita said the proposed disposal provides an opportunity for the group to unlock its investment in the land at an attractive valuation as well as monetise non-core assets.

The move, Jasa Kita said aligns with the group’s current objectives and business plans to focus on its trading and distribution of industrial tools and equipment, such as electric power tools, electric motors, mechanical hand and air tools as well as bathroom products.

Of the RM43.08 million proceeds from the land sale, the group has earmarked RM37.18 million to acquire new business/ assets to be identified. At this juncture, the board has yet to identify the type or nature of the business or asset to be acquired.

Another RM4.5 million will be utilised for the special interim dividend to reward its shareholders and the remaining RM1.4 million for estimated expenses related to the proposed disposal.

Part of the land is being rented by Jasa Kita to Best Auctions Sdn Bhd (BASB) at a monthly rental rate of RM60,000 for the sole purpose of storage of vehicles. Based on the letter of extension dated July 27, 2023, the rental arrangement has been extended until Feb 29, 2024, unless terminated in accordance with the terms of the vehicle storage agreement.

Upon the completion of the proposed disposal, Jasa Kita will if required by Urban Reach terminate the vehicle storage agreement by serving one-month notice to BASB pursuant to the terms of the vehicle storage agreement.

The disposal, which is expected to be completed in the second quarter of 2024, requires approval from both companies' shareholders at respective extraordinary general meetings to be convened.

Jasa Kita's share price was unchanged at 13 sen, giving the group a market capitalisation of RM58 million.

FCW closed up two sen or 1.9% at RM1.07, translating into a market capitalisation of RM267 million.