EI Power buys Glenmarie factory for RM17.2m for new HQ and warehouse

EI Power Bhd has agreed to acquire a freehold factory in Glenmarie, Shah Alam, for RM17.2 million to establish a permanent headquarters and warehouse. The acquisition will be funded largely by IPO proceeds, with the property housing a rooftop tenancy generating RM6,000 monthly rental income.

PETALING JAYA (Sept 9): EI Power Bhd has agreed to acquire a freehold factory in Glenmarie, Shah Alam, for RM17.2 million as it looks to establish a permanent headquarters and warehouse and reduce its reliance on rented premises.

Its wholly-owned subsidiary EI Power Technologies Sdn Bhd (EIPT) entered into a sale and purchase agreement (SPA) on Wednesday (Sept 9) with Elitesoft Asia Sdn Bhd to acquire the industrial property at 17, Jalan Pelukis U1/46B. In a Bursa Malaysia filing, EI Power said the property comprises about 16,100 sq ft of freehold land with a two-and-a-half-storey semi-detached factory with a built-up area of about 17,472 sq ft.

The property had a market value of RM17.3 million, based on a valuation by independent valuer IM Global Property Consultants Sdn Bhd dated June 20 using the comparison approach. The RM17.2 million purchase price was arrived at on a willing-buyer willing-seller basis.

EI Power, which was listed on Bursa Malaysia's ACE Market on May 21, currently operates from rented office and storage premises in Selangor. The group said the acquisition would provide additional office and warehouse capacity for its growing workforce, storage requirements and operations, while establishing a permanent headquarters and reducing its longer-term reliance on rented premises.

EI Power plans to fund up to RM15 million of the purchase price from proceeds raised through its initial public offering, with the remaining RM2.2 million to come from internally generated funds. The RM15 million had been earmarked for the acquisition and set-up of a new headquarters and warehouse under the group's April 21 prospectus. The group also intends to undertake renovation and fit-out works after completing the acquisition. Up to RM3.3 million of IPO proceeds had been earmarked for renovation of the new facility, although the actual renovation cost has yet to be determined.

The 11-year-old factory has an existing rooftop tenancy with a Malaysian telecommunications infrastructure provider at RM6,000 a month, expiring on May 31, 2027. The tenancy and rental income will be transferred to EIPT upon handover of the property. The property is currently charged to Alliance Bank Malaysia Bhd, with part of the purchase price to be used to redeem the charge.

The balance of the purchase price is payable within three months under the SPA, with an automatic one-month extension available subject to interest of 8% per annum. The acquisition does not require shareholder or other regulatory approvals. EI Power expects it to be completed within three months from the SPA date, with the one-month extension available if required.