The proposed deal is expected to be finalized by 4Q22
by LYDIA NATHAN / Photo by TMR FILE PIX
PUBLICINVEST Research has increased its call for Malakoff Corp Bhd to ‘outperform’ following its recent corporate exercise to acquire a 5.8 acre (2.34 ha) industrial plot of land in Klang, Selangor, for 25 million RM with Media Prima Bhd through its wholly owned subsidiary Alam Flora Environmental Solutions Sdn Bhd (AFES).
The investment bank kept its price target at RM 1.02 given the rising share price, good dividend yield, and appeal as a defensive game.
He hasn’t made any changes to his earnings estimates yet, as the development plan is expected to take 42 months.
The proposed acquisition of the land is expected to be completed within 90 days of the unconditional date of the sale and purchase agreement by the fourth quarter of 2022 (4Q22).
The deal was announced after Media Prima has announced that it will buy back its property in Bangsar where its head office is located in Permodalan Nasional Bhd for RM 156.4 million.
PublicInvest Research stated that the the land newly acquired by Malakoff is strategically located next to at Northport (M) Bhd, Westports (M) Sdn Bhd and the planned future development of the port of Pulau Carey.
It is accessible from downtown Klang via Jalan Kapar followed by Selat Klang Highway to Lebuh Sultan Mohamed 1 which will lead to said property.
“We understand that the land will be used by AFES to proceed with the proposed development of an off-site recovery facility to manage various types of waste and expand its environmental business line in accordance with its strategic plan,” the bank said. investment.
The market value of the land was assessed by an independent expert on February 17, 2020 at RM25 million despite the seller’s purchase of the land in 2006 for RM13.3 million.
AFES management believes that the assets should be able to meet the requirements of the recovery facility with minimal renovation.
âThe total cost of developing the recovery facility is expected to be RM 130 million over 42 months,â PublicInvest Research said.
Malakoff stock closed at 82 sen last Friday, valuing the company at RM 4.1 billion.