Pekat Group buys RM30.58m Nilai industrial land for switchgear expansion

Pekat Group Bhd has agreed to acquire six freehold industrial parcels in Nilai, Negeri Sembilan, for RM30.58 million to expand its switchgear and power-related businesses. The 410,191 sq ft site, acquired through subsidiary EPE Switchgear, will house manufacturing and energy storage operations.

PETALING JAYA (Nov 2): Pekat Group Bhd has agreed to acquire six contiguous parcels of freehold industrial land in Nilai, Negeri Sembilan, for RM30.58 million to accommodate the expansion of its switchgear manufacturing and other power-related businesses.

In a Bursa Malaysia filing on Monday (Nov 2), Pekat said its indirect 60%-owned subsidiary EPE Switchgear (M) Sdn Bhd signed six separate sale and purchase agreements with Sime Darby Property (Nilai) Sdn Bhd on Friday (Oct 30). The parcels cover 38,108 sq m, or approximately 410,191 sq ft (9.42 acres), within the Bandar Hamilton Nilai – Plot 5 industrial development in Mukim Labu, Seremban. The net consideration, which includes infrastructure works to be undertaken by the vendor, works out to about RM74.54 psf.

Pekat said EPE’s existing premises in Nilai lacked sufficient capacity for the group’s planned expansion. The land will accommodate EPE’s existing switchgear manufacturing operations and the group’s battery energy storage system, transformer and substation businesses, while providing long-term security of tenure for its operations.

The parcels are designated IND 07 to IND 12, corresponding to PT 52152 to PT 52157, respectively. They are vacant, designated for industrial use and free from encumbrances. The net consideration reflects rebates totalling RM2.25 million against an aggregate purchase price of RM32.82 million. These comprise early bird, bulk purchase and early signing rebates of 3%, 2% and 2%, respectively, calculated successively.

Sime Darby Property (Nilai), a wholly-owned subsidiary of Sime Darby Property Bhd, will undertake the infrastructure works at its own cost. These include earthworks, external drains, main water and sewerage reticulation, telecommunications manholes and ducting, and main access roads fronting the parcels. The acquisition is expected to be completed upon delivery of vacant possession within the 48-month infrastructure construction period from the agreement date, subject to applicable adjustments under the agreements, including consent-related provisions for IND 11 and IND 12.

For late delivery, the vendor must pay damages at 10% per annum on the net amount paid by EPE, excluding delays arising from force majeure or other events permitted under the agreements. EPE must commence construction of an industrial building on each parcel within 36 months after the infrastructure construction period expires, subject to permitted extensions. Failure to do so would allow the vendor to repurchase the affected parcel at 90% of the net amount EPE has paid towards its purchase price when the option is exercised.

The purchase will be funded through internally generated funds and/or bank borrowings. Pekat said the acquisition was not expected to materially affect its net assets or earnings for the financial year ending Dec 31, 2026, apart from finance costs on any borrowings drawn down. Its gearing may increase to the extent bank borrowings are used. The company said the acquisition does not require shareholder or regulatory approval, except for Negeri Sembilan state authority consent to transfer IND 11 and IND 12, if required under their title restrictions.