KUALA LUMPUR (Nov 7): O&C Resources Bhd is purchasing 4,101 square feet or 1.01 acres of freehold land in Petaling Jaya for RM24.59 million from Tropicana City Sdn Bhd (TCSB).

The land is currently occupied by an incomplete building structure, which is intended to be developed as a commercial building, O&C said in a filing with the stock exchange today.

O&C Construction Sdn Bhd, a wholly-owned subsidiary of O&C, had entered a sale and purchase agreement today with TCSB, wholly-owned subsidiary of Tropicana Corp Bhd via Bakat Rampai Sdn Bhd.

The purchase price, which represents a premium of RM6.07 million to TCSB’s net book value of RM18.52 million of the land as at Dec 31, 2017, was arrived at on a willing-buyer willing-seller basis, O&C added.

The price of RM557 per square feet is deemed to be “reasonable” as the locality offers good capital appreciation potential, the property developer said.

“The land will benefit the group in the long term as it will enable the company to diversify its business operation into property development,”

O&C said, adding that it is expected to contribute positively to the group’s future earnings.

The purchase is expected to be funded via bank facilities and internally-generated funds.

It is not expected to have a material impact on O&C’s issued and paid up share capital, earnings and net assets for its 2018 financial year, and gearing.

Shares in O&C closed unchanged at 55 sen today, leaving the group with a market capitalisation of RM160.82 million.

Reported by: TheEdgeMarkets