EURO 7208 EURO HOLDINGS BERHADs to sell Rawang warehouse land for RM13.8mil cash

 EURO 7208 EURO HOLDINGS BERHADs to sell Rawang warehouse land for RM13.8mil cash

KUALA LUMPUR (Nov 10): Furniture maker Euro Holdings Bhd is selling a plot of freehold industrial land with a two-storey detached factory and a three-storey office building built on it in Rawang, Selangor — which is being used as the group's warehouse now — for RM13.8 million cash, to bolster its cash flow to repay bank borrowings and to fund its working capital.

In a bourse filing on Thursday, Euro Holdings said its wholly-owned Euro Space Industries (M) Sdn Bhd has inked a sale and purchase agreement with Ban Hee Metal Sdn Bhd to sell the 82,602 sq ft land.

The property is located within an industrial development area located in Rawang Perdana, about 3km to the southeast of Pusat Bandar Rawang.

Based on the audited net book value of the property as at Dec 31, 2021 of about RM4.5 million, Euro Holdings is expected to record a one-off net gain of RM7.89 million from the disposal.

Of the proceeds from the disposal, RM11 million will be used to repay borrowings, while RM1.39 million will be used for working capital; the rest will be used to defray estimated expenses relating to the exercise.

Euro Holdings said the reduction of borrowings is expected to result in annual interest savings of about RM740,000, thus allowing the group to have greater flexibility in sourcing for funding alternatives in the future, and to improve its cash flow.

The proposed disposal is part of Euro Holding’s business transformation plan to rationalise non-core assets and to move the group’s warehouse in Rawang to the plant for the manufacturing and trading of steel furniture in Malacca.

The exercise, which is expected to be completed in the first quarter of 2023, is subject to shareholders' approval.

TA Securities Holdings Bhd has been appointed as the principal adviser for the proposed disposal.

Euro Holdings’ share price finished 22.22% or three sen lower at 10.5 sen, bringing the group a market capitalisation of RM92.6 million.

http://www.theedgemarkets.com/article/euro-holdings-sell-rawang-warehouse-land-rm138mil-cash