PETALING JAYA (July 8, 2026): Ge-Shen Corp Bhd is proceeding with the disposal of five freehold industrial properties in Mukim Tebrau, Johor Bahru, for RM35.5 million cash as part of its strategy to streamline operations, reduce borrowings and improve financial flexibility.
The disposal will be carried out through Ge-Shen’s wholly-owned subsidiary Ge-Shen Plastic (M) Sdn Bhd (GSP), which has entered into a new sale and purchase agreement (SPA) with Plastico Sdn Bhd.
The latest agreement follows the mutual termination of an earlier SPA after the purchaser failed to secure financing within the agreed completion period.
Disposal involves five industrial properties in Johor Bahru
The transaction covers five freehold industrial properties located at Jalan Riang 21 and Jalan Riang 23, Taman Gembira, Mukim Tebrau, Johor Bahru.
The properties comprise:
Industrial land areas ranging from approximately 29,439 sq ft to 52,287 sq ft.
Built-up areas ranging from approximately 21,342 sq ft to 50,830 sq ft.
Buildings used for office, warehouse and factory operations.
Industrial buildings aged between 26 and 32 years.
All five properties are currently fully occupied and are located close to each other, providing operational continuity before Ge-Shen relocated its manufacturing activities.
The properties are charged to several financial institutions, including Public Bank Bhd, Alliance Bank Malaysia Bhd and United Overseas Bank (Malaysia) Bhd.
Fresh SPA after previous agreement termination
Ge-Shen previously entered into an SPA with Plastico on August 4, 2025, for the disposal of the same properties at RM35 million.
However, the agreement was mutually terminated on December 16, 2025 after Plastico was unable to secure financing to complete the purchase within the required timeframe.
Following the termination, Plastico confirmed that financing had been secured for the acquisition.
After considering the buyer’s funding readiness, continued interest in the properties and the strategic benefits of the disposal, Ge-Shen decided to proceed with the new SPA.
Disposal price below valuation but generates gain
The RM35.5 million disposal consideration was negotiated on a willing-buyer, willing-seller basis.
An independent valuation conducted by Irhamy Valuers International Sdn Bhd valued the properties at RM38.28 million as at November 22, 2023 using the comparison method.
The agreed selling price represents a discount of approximately 7.26% compared with the valuation.
Based on the audited net book value as at December 31, 2025, the properties had a combined carrying value of approximately RM20.43 million.
Ge-Shen expects to record an estimated net gain on disposal of approximately RM12.63 million.
Proceeds mainly used for debt repayment
The RM35.5 million proceeds will be allocated as follows:
RM25.698 million for repayment of bank borrowings secured against the properties.
RM7.239 million for working capital requirements, including operating expenses and staff costs for its injection moulding and assembly segment.
RM2.563 million for disposal-related expenses, including professional fees and related costs.
The repayment of borrowings is expected to strengthen the group's financial position and reduce its gearing level.
Operational consolidation and efficiency improvement
Ge-Shen said the disposal supports its broader operational restructuring strategy.
The company has relocated its operations to an existing plant in the northern region, positioning production closer to the majority of its customers.
The move is expected to improve logistics efficiency, reduce transportation costs and enhance overall operational effectiveness.
Positive financial impact expected
Based on an illustrative scenario, assuming the disposal took effect from January 1, 2025, Ge-Shen estimated that profit attributable to owners could increase from RM20 million to RM30.067 million after including the disposal gain and related expenses.
Basic earnings per share would also improve from 4.95 sen to 7.23 sen under the same scenario.
Following repayment of borrowings, the group's gearing ratio is expected to improve from 0.71 times to 0.56 times.
The transaction will not affect the company's share capital or substantial shareholders' shareholdings and does not require shareholder approval.
Completion of the disposal is expected in the fourth quarter of 2026.
Key Takeaways
Ge-Shen is monetising five fully occupied industrial properties in Johor Bahru for RM35.5 million as part of a balance-sheet restructuring exercise.
The disposal allows the company to unlock value from industrial assets while focusing resources on its relocated manufacturing operations.
Although the selling price is below the independent valuation of RM38.28 million, the transaction is expected to generate an estimated RM12.63 million disposal gain.
A significant portion of the proceeds will be used to repay borrowings, reducing gearing from 0.71 times to 0.56 times.
The relocation of manufacturing operations closer to customers is expected to improve logistics efficiency and reduce operating costs.
The renewed SPA highlights the importance of financing availability in completing industrial property transactions.
The transaction demonstrates how manufacturers can strategically recycle industrial property assets to strengthen cash flow, reduce debt and improve long-term operational efficiency.
Malaysia