Manhattan Resources‘ indirect subsidiary PT Kariangau Power has entered a deal to sell two vacant land parcels located in East Kalimantan in Indonesia to PT Dermaga Perkasapratama for 271.27 billion rupiah, or around S$25.73 million, the company said in a filing to SGX Thursday.
“The proposed disposal is an opportunity for the group to realise its property investment given that it is currently vacant and not generating any income and in light of the current Covid-19 situation, rental income for the land may be restricted or limited in the foreseeable future,” Manhattan Resources said in the filing.
“The proposed disposal is in line with the company’s intention to diversify into the renewal energy business,” the company said. “The sale consideration will also provide another source of capital expenditure, development cost, and working capital for the pipeline projects for the renewal energy business.”
The net book value of the land was around S$6.51 million as of end-December 2020, and the deal will result in a gain on disposal of S$19.48 million, the filing said.
Manhattan Resources indirectly holds 86.11 percent of PT Kariangau Power, which operates a coal-fired steam power plant in East Kalimantan, the filing said.
The land was previously reserved for expanding the power generation business, but has remained vacant, the filing said.
The land parcels are located at Kariangau Village, Balikpapan, in East Kalimantan, with one 145,156 square meters and one 126,118 square meters, the filing said.
The buyer of the property, East Kalimantan-based PT Dermaga Perkasapratama, which is engaged in food production, is 87.4 percent owned by PT Bayan Resources, the filing said.
Dato’ Dr. Low Tuck Kwong (LTK) and his son, Low Yi Ngo, who is the CEO, managing director and a shareholder of Manhattan Resources, hold 55.13 percent and 0.17 percent, respectively, of Bayan Resources, making the deal an interested person transaction, the filing said.
LTK holds 81.23 percent of Manhattan Resources, the filing said.
The deal is subject to approval of Manhattan Resources independent shareholders at an extraordinary general meeting (EGM), the filing said.