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Wednesday, December 16, 2009

KPJ to acquire RM22m land in Muar for partially completed hospital

KUALA LUMPUR: KPJ HEALTHCARE BHD, a hospital management group linked to the listed AL-AQAR KPJ REIT on Wednesday, Dec 16 announced plans to acquire a plot of freehold land in Muar, Johor for RM22 million in cash.

On the rationale of the deal, the company said: "The proposed acquisition is in line with KPJ group's objective to increase its network of hospitals to locations where private healthcare is in demand."

The company announced in a stock exchange filing yesterday that its unit Maharani Specialist Hospital Sdn Bhd has entered into a Sale and Purchase Agreement (SPA) with Property Base Development Sdn Bhd for the proposed acquisition of land on which stands the partially completed seven-storey Maharani Specialist Hospital Building.

The building, whose construction was abandoned since 2005, is expected to have a gross floor development area of 260,000 sq ft.

In the announcement, KPJ said it intends to commence construction works on the hospital building, immediately upon completion of the SPA. Further development work is expected to cost about RM26 million to be financed by internally generated funds, with completion by end-2011. The building is expected to be used as a private hospital.

The acquisition is to be free of encumbrances and KPJ expects to complete the land acquisition by first quarter of 2010. The deal is not subject to KPJ shareholders' approval but regulatory and government approvals are required, the company said. Ministry of Health approval is necessary for the completed property to be operated as a private healthcare facility.

By The EDGE Malaysia (by Loong Tse Min)

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