KUALA LUMPUR (Oct 5): Sunway Bhd has clarified that there was no valuation made by independent registered valuer on the 559-acre prime industrial land in Batu Kawan, Penang which it acquired from Penang Development Corp (PDC).

The clarification came in response to Bursa Securities’ query, following a previous article published by The Edge on Oct 4 which outlined Penang Chinese Chamber of Commerce (PCCC) concerns regarding the land sale.

While there was no valuation made by independent registered valuer, Sunway said that based on market available information to them, the market price for undeveloped freehold industrial land in the Batu Kawan area ranged between RM21 and RM35 per square feet.

“Given that the land is leasehold land and undeveloped with a lot of land filling and infrastructure work to be undertaken by Umech Land, the implied price of RM27 per square foot was deemed to be a fair price,” it said.

On Oct 3, PCCC president Datuk Seri Hong Yeam Wah pointed out that industrial land in BKIP2 was made available on the open market at RM80 per square foot where parcels were as small as five acres each.

In this regard, Hong questioned whether the selling price of RM26.53 per square foot by PDC to Sunway was reasonable.

Meanwhile, Sunway also clarified with the stock regulators that UMech Land Sdn Bhd is a subsidiary of the group despite not being listed in its Annual Report 2022.

Earlier, The Edge in its Frankly Speaking column had questioned the RM646 mil Batu Kawan land deal between Sunway’s unit, UMech Land Sdn Bhd and DC as little was known about the background of this Sunway unit.

According to the group, its wholly-owned subsidiary, Sunway Bukit Gambier Sdn Bhd (SBG) subscribed to 23.33 million ordinary shares worth RM1 a piece after UMech Land issued 23.33 million shares, representing 70% of the enlarged share capital to SBG.

This, in turn, indirectly put UMech Land as a subsidiary of Sunway.

To recap, on Sept 27, the group announced that its 70%-owned Umech Land Sdn Bhd had signed a joint development agreement with PDC to develop a 559-acre prime industrial land in Batu Kawan, Penang, in exchange for a land entitlement of RM646.02 million.

PDC will receive a land entitlement that consists of a RM64.6 million deposit, with the remaining RM581.42 million to be paid via four instalments. Both parties will collaborate on the development of the land, which will be known as “Batu Kawan Industrial Park 2″.

“Following Sunway’s subscription to ordinary shares in Umech Land, Umech Land made the deposit payment of RM64.6 million to PDC in accordance with the terms of the joint development agreement (JDA).

“After the payment of the deposit, the cash and bank balances of Umech Land as at 4 October 2023 was RM130,848.89,” the group told Bursa Malaysia on Thursday.

Meanwhile, the group also stressed that UMech Construction is not a subsidiary or affiliated to Sunway and it has no equity interest in UMech Construction.

Shares in Sunway finished one sen or 0.52% higher at RM1.95, giving it a market capitalization of RM9.75 billion.