Olympia Ind sells land in Melaka for RM42m

Olympia Industries Bhd's wholly-owned subsidiary, City Land Sdn Bhd, has entered into sale and purchase agreements for the disposal of 14 pieces of freehold land measuring 21.38 hectares in Melaka to Starwatt Engineering Sdn Bhd for RM42 million.

In a filing to Bursa Malaysia today, the company said the proposed disposal was in line with Olympia Industries' restructuring exercise to reduce its total debts.

"Resulting from the early settlement of the existing encumbrances with the financier, the Olympia Industries group will derive significant interest savings estimated at RM4.3 million, assuming redemption of 2007/2013 Redeemable
Unsecured Loan Stocks (nominal value amounting to RM12.6 million) and 2007/2013 Irredeemable Convertible Bonds (nominal value amounting to RM21.3 million), is made before April 21, 2011," it said.

The proposed disposal is expected to reduce the group's gearing position to 0.49 times from 0.53 times. Olympia Industries will make a gain of RM0.96 million from the proposed disposal.

The company intends to utilise the proceeds from the proposed disposal to redeem the existing encumbrances of RM33.9 million. The balance will be used for working capital requirements of the group.

The timeframe for full utilisation of proceeds is expected within a year after the completion of the transaction. The proposed disposal is expected to be completed on or before March 31, 2011 or the extended date of completion by the end of April 2011.

By Bernama