Johor bahru: Ge-Shen Corp Bhd's wholly owned subsidiary, Ge-Shen Plastic (M) Sdn Bhd, has reached a sale and purchase agreement with Plastico Sdn Bhd to divest five parcels of freehold land in Tebrau, Johor, for a total of RM35.50 million.

According to BERNAMA News Agency, the precision engineering and manufacturing services provider revealed in a Bursa Malaysia filing that the proposed land sale will allow the group to strategically manage the proceeds. The proceeds are expected to significantly enhance the group's cash flow upon realization and will aid in reducing the company's bank borrowings, thus lowering Ge-Shen's gearing ratio.

The company anticipates finalizing the disposal in the fourth quarter of 2026. Upon completion, RM25.69 million from the proceeds will be directed towards settling bank borrowings. Additionally, RM2.56 million will be allocated to cover estimated expenses related to the transaction. The remaining RM7.23 million is earmarked for use as working capital.

Ge-Shen foresees that this transaction will bolster the group's financial standing and operational performance. The group is projected to record a net pro forma gain on disposal amounting to RM12.63 million, calculated based on the net book value as of December 31, 2025.