Senheng To Acquire Industrial Land, Warehouse Facility For Rm75.8 Mln

KUALA LUMPUR, Sept 25 (Bernama) -- Senheng Electric (KL) Sdn Bhd, a wholly-owned subsidiary of Senheng New Retail Bhd (Senheng), is set to purchase a freehold industrial land in Klang, Selangor, together with a single-storey warehouse facility for RM75.8 million.

The company entered into the sales and purchase agreement to acquire the land and the warehouse from SDM Assets III Sdn Bhd.

In a filing with Bursa Malaysia, Senheng said the company plans to utilise some of the proceeds raised from its initial public offering (IPO) to fund part of the purchase consideration.

“As of June 30, 2023, the company has utilised approximately RM144.42 million out of RM267.50 million of proceeds from the IPO,” it said. 

It said the single-storey warehouse facility with three-storey office space, inclusive of ancillary buildings and external structure, is currently being rented by Senheng KL and used as the central distribution centre (CDC) for Senheng and its subsidiaries.

“By accepting product deliveries at a centralised location instead of the many regional hubs and retail outlets directly, the group is able to streamline its own supply chain and reduce the logistics cost,” it said. 

In return, Senheng said the group receives discounts from certain suppliers based on such reduction in logistics costs, and therefore, the CDC plays a vital role in the group’s logistics network.

“Pursuant to the acquisition, the group is able to derive net rental savings of approximately RM2.2 million per annum,” it said.

In addition, it said the group will have direct ownership of the CDC, thereby eliminating uncertainties such as unexpected termination or non-renewal of tenancy by the landlord, which could cause significant disruption in the operations of the CDC and consequently, the group’s business.

On its prospects, the group said it plans to launch 61 new and upgraded stores over a span of three years, from 2022 to 2024.

“The group is optimistic that the acquisition will contribute positively to the group’s operational and financial performance,” it said. 

It added that the corporate exercises are expected to be completed by the fourth quarter of 2023, barring any unforeseen circumstances.

-- BERNAMA