XIN HWA GETS SHAREHOLDERS' APPROVAL TO DISPOSE OF JOHOR PROPERTY

KUALA LUMPUR, June 22 -- Xin Hwa Holdings Bhd has received the nod from its shareholders for the proposed disposal of 6.56 ha of leasehold industrial land with buildings located in the Pasir Gudang Industrial Area, Johor to Axis Real Estate Investment Trust (Axis-REIT) for RM75 million.

In a statement today, the integrated logistics services provider said the leaseback of the properties by Axis-REIT to Xin Hwa is fixed for a period of 10 years with an option to renew for a further five years, which shall commence immediately following the completion of the disposal.

Managing director Ng Aik Chuan said the group believes that this is timely given the current market landscape.

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“Our financial flexibility is enhanced while our balance sheet is strengthened by the RM75 million proceeds from the disposal. More significantly, it also equips us with the resources to capitalise on investment opportunities that would enrich shareholders’ value,” he said.

Ng said Xin Hwa has allocated RM35 million of the RM75 million proceeds for investment purpose.

“Currently, we are seeing many attractive opportunities arising from the existing economic climate and Xin Hwa is thoroughly assessing all our options.

“We are looking at investment opportunities that would generate healthy returns and contribute positively to our earnings moving forward,” he added.

Meanwhile, he said the construction of its new e-fulfilment centre in Shah Alam is close to completion.

The centre consists of a seven-storey office and a three-storey warehouse with 300,000 square feet (sf) warehousing space.

He said this would increase its total warehousing space by 46 per cent to 954,000 sf, allowing it to capture more business as more than 90 per cent of its existing capacity is utilised.

“On balance, the group remains positive on our outlook as we anticipate activities in logistics and warehousing sectors to pick up premised upon the gradual recovery of the global and local economies following the mass roll-out of COVID-19 vaccines,” Ng said.

Barring unforeseen circumstances, the disposal is expected to be completed by end-June 2021.

-- BERNAMA