Ann Joo Resources Berhad Announces Major Land Disposal Deal Worth RM117.8 Million

Key Points of the Announcement

• Disposal of Freehold Industrial Land: Ann Joo Resources Berhad (“ANNJOO” or “the Company”) has announced the sale of a 60.1-acre portion of its freehold industrial land (Title No. Hakmilik Geran 67225, Lot 8072, Bandar Gurun, Daerah Kuala Muda, Negeri Kedah) to LB Advanced Material Asia Sdn. Bhd. for a total cash consideration of RM117,808,020.
• Land Details: The total land bank under the title is 96.87 acres, and the portion being disposed (60.1 acres) is currently bare and unused. The buyer intends to develop manufacturing facilities on this land.
• Financials & Valuations:
  • The net book value of the disposed land (Plot 7) stands at RM23,754,000.
  • The estimated gain to ANNJOO from this disposal is approximately RM40.4 million, a significant sum though notably smaller compared to the Group’s audited loss of RM296.6 million for the financial year ended 31 December 2024.
  • The consideration was arrived at via a “willing-buyer willing-seller” negotiation, equivalent to RM45 per square foot.
  • No separate independent valuation was done for Plot 7 specifically; the last valuation (cost approach) was on multiple parcels in November 2025 by Savills (Malaysia) Sdn. Bhd.
• Land Status & Encumbrances:
  • The land is freehold but currently held under a master title charged in favour of an ANNJOO group company. ANNJOO is responsible for procuring the full discharge of this charge and transferring an individual title to the buyer free from encumbrances.
• Development Plans:
  • The land forms part of the Gurun Heavy Industrial Park – Phase 1A, under a Joint Venture with Transyear Sdn. Bhd.
  • Development is slated to start in April 2026 and complete by March 2027, with an estimated development cost of RM36.9 million and a gross development value of RM95 million.
  • Development approvals are pending; only the submission for subdivision approval has been made so far.
• Use of Proceeds:
  • Out of the sale proceeds, RM30.4 million will be allocated for working capital: 60% for operating expenses (including staff costs and administrative expenses) and 40% for settling trade and other payables. The remainder will likely go towards loan repayment and other obligations.
  • Interest savings from loan repayment are estimated at RM1.5 million per annum (before tax) based on current floating rates.
• Buyer Information:
  • LB Advanced Material Asia Sdn. Bhd. is wholly owned by Billions (Hong Kong) Corporation Limited.
• Other Obligations & Liabilities:
  • ANNJOO will assist the buyer in obtaining electricity supply for the land and is obligated to obtain discharge of the existing charge, as well as subdivision and conversion of the land.
  • No guarantees or contingent liabilities remain with ANNJOO following the disposal.

Implications and Price-Sensitive Information for Shareholders

• Balance Sheet Impact:
  The disposal will result in a net gain of RM40.4 million, potentially improving the company’s financial position. However, shareholders should note that this gain is not sufficient to offset the significant loss of RM296.6 million in FY2024.
• Interest Savings:
  The expected annual interest savings of RM1.5 million can support future profitability and cash flow, helping ANNJOO manage its debt more efficiently.
• Pending Approvals:
  The transaction and subsequent development are subject to government approvals for subdivision and conversion, which introduces execution risk.
• Development Uncertainty:
  The development plan is at 0% completion, and the gross development value is below the disposal price, which may affect the long-term value realization for the buyer and related parties.
• Strategic Focus:
  This disposal signals a strategic shift for ANNJOO to unlock value from its landbank and strengthen its working capital position, a move that may be viewed positively by investors seeking a leaner, more focused operation.

Conclusion

The RM117.8 million land disposal is a significant corporate action for Ann Joo Resources Berhad, with clear implications for its financial health, operations, and future strategy. While the immediate gain is notable and interest savings will support the bottom line, the overall impact must be weighed against the company’s recent losses and the execution risks related to pending approvals and development plans. Investors should monitor further announcements regarding the completion of this transaction and the progress of the development for potential future value creation.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or recommendations. Investors should conduct their own due diligence or consult a licensed financial advisor before making investment decisions. The author and publisher accept no liability for any losses arising from reliance on this information.

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