KUALA LUMPUR: Heng Huat Resources Group Bhd’s wholly owned subsidiary HK Gua Musang Sdn Bhd has proposed to buy a piece of leasehold industrial land measuring 44,461 sq m at Bandar Gua Musang, Kelantan, for RM3.67 million cash.

Its filing with Bursa Malaysia today showed HK Gua Musang had entered into a conditional sale and purchase agreement with Eleplas Wood Technology Sdn Bhd – a wooden parts and wooden furniture manufacturer – to acquire the land, which has a 66-year lease expiring on July 24, 2051.

“The proposed acquisition will enable us to further our operations in the manufacturing and trading of oil palm biomass materials and value-added products, as the group intends to expand its existing production facility with the construction of a new production factory on the land in due course,” Heng Huat said.

Heng Huat said the purchase consideration was arrived at on a “willing buyer-willing seller” basis and that it would fund the purchase through internally generated funds and/or external borrowings.

The proposed acquisition, to be completed by the third quarter of next year, is not expected to impact Heng Huat’s earnings for the financial year ending Dec 31, 2014, but may contribute positively to its earnings in the future, upon commencement of operations of the new production facility to be constructed on the land, it said.

Heng Huat, which was listed on the ACE market on July 25 this year, closed 0.5 sen down or 1.02% to 48.5 sen, giving it a market capitalisation of RM99.81 million.