S P Setia has announced another series of land disposal after its recent offload to Mah Sing, this time Pelangi Sdn Bhd the developers indirect wholly-owned subsidiary entered into a conditional sale and purchase agreement with Scientex Lestari Sdn Bhd to dispose 8 parcels of freehold land measuring in Johor for RM547.6 million.

The land measures approximately 959.721 acres and is situated in Mukim of Tebrau, District of Johor Bahru. It is situated approximately 18 kilometres east of the Senai International Airport and 28 kilometres north of Johor Bahru city centre, the Lands are located along the Senai – Desaru Expressway (“SDE”), to the north-west of Taman Bestari Indah and off the western side of Jalan Sungai Tiram in Ulu Tiram, Johor. Access to the Lands from Johor Bahru city centre is via the Pasir Gudang Highway or Tebrau Highway leading to Jalan Kota Tinggi and thereafter to the SDE. There is currently no direct access to the Lands from SDE.

The group said there are also other existing and ongoing residential developments in the wider neighbourhood such as Taman Bestari Indah, Taman Bukit Tiram, Taman Pelangi Indah, Austin Duta, Eco Spring, Eco Summer, Taman Puteri Wangsa, Taman Seri Austin, Bandar Jaya Putra, Taman Setia Indah, Bandar Dato’ Onn, Taman Bukit Tiram and Felda Ulu Tebrau.

S P Setia said the proposed disposal is in line with the Group’s direction optimise and rebalance its land bank whilst maintaining an efficient capital structure. The Lands under the Proposed Disposal relate to the same Lands initially agreed to be sold to Scientex Quatari Sdn Bhd, a wholly-owned subsidiary of Scientex Berhad as announced on 7 May 2021 to Bursa Malaysia Securities Berhad. However, due to non-fulfillment of a condition precedent, specifically in relation to the approval from the EPU, Ministry of Economy, the transaction was terminated in March 2023. This condition precedent is expected to be satisfied with the Proposed Disposal.

The Proposed Disposal is said to improve the Group’s gearing level and allow acceleration of project development and growth of S P Setia’s remaining townships in Johor and is expected to contribute positively to S P Setia’s profits.

It will also not have any material effect on the earnings per share, net assets per share, save for the Group realising an estimated gain on disposal of approximately RM438.3 million upon completion. The net assets and cash balance of the Group shall increase by approximately RM320.3 million and RM441.4 million, respectively, immediately after the completion of the Proposed Disposal.