PETALING JAYA (Sept 3): Orgabio Holdings Bhd is proposing to acquire a freehold industrial property in Semenyih, Selangor, for RM11.26 million in cash to support the warehousing needs of its instant beverage premix operations.
In a Bursa Malaysia announcement on Thursday (Sept 3), Orgabio said its wholly-owned subsidiary Orgabio Manufacturing Sdn Bhd (OMSB) had entered into a sale and purchase agreement with Chung Lian Fatt for the property.
The property comprises 5,263 sq m, or about 1.30 acres, of industrial land in Mukim Semenyih, Ulu Langat, together with a single-storey detached building with a gross built-up area of 2,006.71 sq m, or about 21,600 sq ft.
The approximately 19-year-old building is currently operated as badminton courts and is intended to be used for warehousing. The property is adjacent to the group’s new factory at Sungai Purun, Semenyih.
The purchase price is the same as the property’s RM11.26 million market value appraised by independent valuer Rahim and Co International Sdn Bhd using the cost approach.
The acquisition will be financed with RM2.3 million of internally generated funds and RM8.96 million of bank borrowings.
Building plans, CF/CCC not available
Orgabio disclosed that the vendor had informed the company that the approved building plans and certificate of fitness for occupation (CF) or certificate of completion and compliance (CCC) for the existing building are not available.
The company said it has engaged a professional firm to undertake the necessary rectification works and assist in obtaining the approved building plans and CF/CCC immediately after completion of the acquisition.
The building was constructed to a warehouse/factory design but is currently used as badminton courts.
Orgabio said the existing building could allow warehouse operations to begin sooner with minimal renovation and fit-out works.
Property adjacent to new factory
Orgabio said the acquisition is part of its expansion strategy and would provide a dedicated warehouse to increase storage capacity and improve distribution and logistics for its instant beverage premix business.
The property’s proximity to its new factory would facilitate the movement of goods between the manufacturing and warehousing facilities, while providing capacity to accommodate higher production output and sales volumes, the company said.
The property is within the Sungai Purun industrial area and is about 1km from an access point to the Kajang-Seremban Expressway (LEKAS).
Gearing to rise
Orgabio expects the acquisition to increase the group’s gearing to 0.32 times from 0.17 times, assuming RM8.96 million of additional bank borrowings, while net assets per share are expected to remain unchanged at 24 sen.
The acquisition is not expected to have any immediate material effect on the group’s earnings. The board believes it will contribute positively to future earnings and earnings per share.
The transaction carries a highest applicable percentage ratio of 18.9% and does not require the approval of Orgabio shareholders or any relevant authorities.
The acquisition is expected to be completed by the fourth quarter of 2026.
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