KUALA LUMPUR, Nov 10 — Rex Industry Bhd’s wholly-owned subsidiary, Rex Canning Co Sdn Bhd, has entered into a conditional sale and purchase agreement with SkyDorm Industries Sdn Bhd for the disposal of two pieces of land worth RM41.80 million.

The total size of the two lands is 31,428 square metres and is located at Seberang Perai, Penang.

The food and beverages company, in a filing with Bursa Malaysia today, said the proposed disposal is in line with the company’s business rationalisation plan, where it intends to undertake certain measures to reduce its overall business operating costs as well as improve its financial position.

"Furthermore, the company may recognise an expected gain from the disposal of RM19.02 million and utilise approximately RM21.05 million from the disposal consideration to repay its bank borrowings.

"Following this, the total bank borrowings of the company are expected to reduce from RM31.53 million to RM10.48 million,” it said.

Rex Industry said the disposal consideration would enable the company to meet its immediate working capital needs, including the purchase of raw and packaging materials, purchase of finished goods and general operating expenses such as marketing costs, staff costs, maintenance expenses, administrative expenses and more.

It said the proposed disposal is to be satisfied via cash and is expected to be completed by the third quarter of 2024.

It added that the proposed disposal is also expected to contribute positively to the earnings of the company for the financial year ending June 30, 2024. — Bernama