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EcoFirst sells land to HCK Capital for RM34 mil to alleviate debt pressures.

EcoFirst Consolidated Bhd is making a strategic move by selling a vacant land parcel in Shah Alam to HCK Capital Group Bhd, marking a significant decision to alleviate financial pressures.

The sale, proposed at RM34 million, will liberate EcoFirst from hefty monthly loan instalments of approximately RM1.35 million, providing much-needed relief to its cash flow, the group announced in an exchange filing on Monday.

The decision to divest the leasehold land, spanning 19,243 square metres in Cahaya SPK, comes amidst EcoFirst's efforts to streamline its financial position. Despite the sale price being RM15.32 million lower than the property's net book value of RM49.18 million, EcoFirst emphasised that the market value, certified by valuer CCO & Associates (KL) Sdn Bhd, stands at RM31 million.

With total borrowings amounting to RM268.54 million and cash reserves at RM9.52 million as of Nov 30, 2023, EcoFirst views the disposal as a prudent step towards strengthening its financial standing. Of the proceeds from the sale, RM20.03 million will be allocated to repay the outstanding loan to the vendor's financier, providing immediate debt relief.

Furthermore, a portion of the proceeds, amounting to RM13.04 million, will bolster general working capital, while RM800,000 will be directed towards settling an outstanding amount owed to Modern Peak Sdn Bhd, the original land vendor. The remaining RM140,000 will cover expenses associated with the land disposal process.

EcoFirst anticipates the completion of the disposal by the first half of 2024, marking a pivotal milestone in its financial restructuring journey. This strategic move underscores the company's commitment to enhancing its financial resilience and positioning itself for future growth opportunities.


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