KUALA LUMPUR: Eastern & Oriental Bhd (E&O) has proposed to dispose of a property on Penang Island that will result in a gain of RM66.26 million for the group.

In an announcement to Bursa Malaysia on Monday, the group said its indirect wholly-owned subsidiary E&O-Pie Sdn Bhd had entered into a sale and purchase agreement with Soaring Profit Sdn Bhd to sell a piece of freehold land measuring 27,743.7 sq m in Bandar Tanjong Pinang section 1, together with the building erected thereon for RM134 million in cash.

E&O's original cost of investment in the land in May 2004 was RM13.57 million while the construction cost of the building from March 2009 to May 2011 amounted to RM54.17 million.

The property, which is situated on the east side of Jalan Tanjong Tokong, forms part of the mixed development known as Phase 1 of E&O's Seri Tanjung Pinang project. Construction of the property was completed on May 23 this year. The building consists of approximately 269,418 sq ft in gross floor area and 1,042 parking bays. The property has been leased to a hypermarket operator since May 26 for 20 years.

"The proposed disposal is in line with the group's strategy of preserving capital value and strengthening the balance sheet through realising cash resources which can then be deployed in other projects and investments to maximise the returns of the E&O group and/or for repayment of borrowings," said E&O.

SOURCE: The Edge Property