TAFI Industries Bhd has confirmed that all conditions precedent for its disposal of a freehold industrial property in Bukit Pasir, Muar, Johor have been fulfilled, paving the way for completion of a RM23.5 million asset sale.
The transaction involves the sale of a factory and industrial land by its subsidiary T.A. Furniture & Projects Sdn Bhd to Bripanel Industries Sdn Bhd, a wholly owned subsidiary of Dominant Enterprise Bhd.
The asset comprises a 2.074-hectare freehold industrial site with a factory building used for furniture manufacturing and office operations.
Transaction details and valuation
TAFI Industries Bhd originally acquired the asset in 2005 for RM9.1 million. As at June 2025, the net book value stood at RM6.6 million.
An independent valuation by VPC Alliance (PJ) Sdn Bhd placed the market value at RM22.5 million, while the agreed sale consideration was slightly higher at RM23.5 million.
The property includes both land and factory facilities with a built-up area of approximately 149,753 sq ft.
Conditions precedent and solar PV arrangements
The completion of the transaction was subject to conditions related to an existing solar photovoltaic installation under the Net Energy Metering programme.
These included regulatory approvals and a novation agreement with Tenaga Nasional Bhd for transfer of account ownership, all of which have now been satisfied, allowing the disposal to proceed.
Strategic rationale and operational shift
TAFI Industries Bhd stated that the disposal aligns with its broader strategy to discontinue loss-making furniture manufacturing operations at the Bukit Pasir facility.
Instead of operating its own manufacturing plant, the group will continue its furniture business through third-party suppliers and manufacturers, shifting towards a more asset-light operational model.
This also supports its intention to strengthen cash flow and redirect focus toward property development and construction-related activities.
Financial impact and use of proceeds
Based on the disposal price, the group expects an estimated gain of approximately RM13.0 million, although this could be lower depending on accounting treatment of the solar PV component.
The transaction is expected to improve earnings per share and net assets per share for the financial year ending June 30, 2026.
Net proceeds will be allocated to working capital, repayment of bank borrowings, potential investments, and Real Property Gains Tax obligations.
Regulatory position and approval requirements
The disposal does not require shareholder approval under Bursa Malaysia Listing Requirements, although it remains subject to state authority consent for land transfer.
What I learn
This case shows how industrial companies in Malaysia are actively monetising manufacturing assets when operations become less efficient or loss-making.
Instead of continuing capital-heavy manufacturing, TAFI is shifting towards an asset-light model by outsourcing production while unlocking value from owned industrial land and factories.
The transaction also highlights how industrial property in established zones like Muar retains strong market value, often close to or above book value when supported by independent valuations.
Another key point is how additional infrastructure elements such as solar PV installations can complicate disposal processes, requiring regulatory approvals and novation agreements before completion.
Overall, the key takeaway is that asset disposal is not just a cash-raising exercise, but also part of a broader restructuring strategy to improve margins, reduce operational risk, and reposition companies toward higher-value activities such as property development.
Yao Mu Realty, based in Kuala Lumpur, Malaysia, specializes in industrial real estate for factories and land, delivering professional and efficient solutions.
Posted by Yao Mu Realty Sdn Bhd on 30 Jun 26
Malaysia