PETALING JAYA: SD Guthrie Bhd has entered into a conditional sale and purchase agreement with Sime Darby Property (Kulai) Sdn Bhd to dispose of 556.96 acres of freehold land in Kulai, Johor, for RM418.51 million cash.
The plantation group said the land, comprising two contiguous plots within its Kulai Estate, Kelan Division, is currently planted with mature oil palms and has residential development potential.
The proposed disposal is expected to generate an estimated net gain of RM373.36 million for SD Guthrie, according to a filing with Bursa Malaysia.
The two parcels comprise approximately 434.99 acres of part of Lot 81287 and 121.97 acres of Lot 81288, both located in Mukim Senai, District of Kulai.
Sime Darby Property (Kulai) is a wholly owned subsidiary of Sime Darby Property Bhd and is principally involved in property development.
SD Guthrie said the disposal consideration was arrived at on a willing-buyer, willing-seller basis at RM17.25 per square foot, representing an 8.35% premium over the RM15.92 per sq ft market value ascribed by independent property valuer Rahim & Co International Sdn Bhd.
The valuer placed the market value of the land, excluding an area earmarked for the proposed Jalan Pintasan Sedenak, Bandar Putra public infrastructure project, at RM374.73 million.
SD Guthrie said it had launched a tender process in May 2025 seeking proposals for a joint industrial park development on the land, but received no joint development proposals due to the land’s current residential zoning.
Two parties instead submitted outright purchase proposals, with Sime Darby Property selected after submitting the higher bid.
The group said the disposal would allow it to unlock the value of its strategic landbank in Malaysia and diversify its earnings profile beyond its core palm oil business.
The land is located within the Johor-Singapore Special Economic Zone, which SD Guthrie identified as a prime prospect for future development in Johor.
Of the RM418.51 million proceeds, RM374.09 million will be used to partially repay bank borrowings, RM41.51 million for estimated real property gains tax and RM2.9 million for expenses related to the transaction.
The partial repayment will be made against the group’s revolving credit facilities, which stood at RM2.59 billion as at June 30, 2026.
SD Guthrie said the repayment is expected to generate interest savings of about RM12.53 million annually, based on an effective average interest rate of 3.35%.
The disposal is expected to increase SD Guthrie’s net assets attributable to shareholders to RM18.61 billion from RM18.24 billion, while net assets per share would rise to RM2.69 from RM2.64.
Its gearing is also expected to improve to 0.22 times from 0.24 times.
On an illustrative pro forma basis, the transaction is expected to lift earnings per share to 41.72 sen from 36.19 sen, while profit after tax attributable to shareholders would rise to RM2.89 billion from RM2.5 billion.
The calculation incorporates the estimated net gain from the disposal and interest savings from the partial repayment of borrowings.
The proposed disposal is subject to, among others, approval from SD Guthrie’s non-interested shareholders at an extraordinary general meeting, relevant land authorities and the Ministry of Economy, where required.
SD Guthrie said it expects the transaction to be completed by the second quarter of 2027, barring unforeseen circumstances.
The land was acquired by SD Guthrie in 1941 for RM5.66 million and has a net book value of RM740,000 as at Dec 31, 2025. It generated RM670,000 in net profit attributable to the land for the financial year ended Dec 31, 2025.
The transaction is a related-party transaction, with AmanahRaya Trustees Bhd-Amanah Saham Bumiputera, a major shareholder of SD Guthrie, also being a major shareholder of Sime Darby Property.