Kossan buys property from CBIP for RM40m to facilitate production expansion

Kossan buys property from CBIP for RM40m to facilitate production expansion

06 Jul 2020

Kossan Rubber Industries Bhd has said its unit is acquiring an industrial property measuring 4.05ha in Meru, Selangor for RM40 million cash to facilitate an expansion of its production facilities.

The property is located adjacent to the existing production facilities of Kossan’s wholly-owned latex gloves manufacturing arm, Ideal Quality Sdn Bhd, which will allow the group to expand without delay as all utilities are available, Kossan said.

Kossan is acquiring the property, which includes a factory, an office building and other facilities via Ideal Quality from Advance Boilers Sdn Bhd, a wholly-owned subsidiary of CB Industrial Product Holding Bhd (CBIP).

For CBIP, the proposed disposal is expected to result in a gain of RM6.94 million after considering its carrying value, depreciation, estimated expenses and company tax.

“It is also an opportunity for CBIP to reorganise its business portfolio and focus on its core business which is palm oil mill equipment and engineering works,” it said.

Shares in Kossan rose RM1.05 or 11.25% to close at its fresh record high of RM10.38, valuing the glove maker at RM13.28 billion.

Shares in CBIP closed unchanged at 91 sen, valuing the group at RM489.81 million.

Source: The Edge Markets