KUALA LUMPUR (March 16): Elsoft Research Bhd is selling a property in Barat Daya, Penang for RM38 million, proceeds of which will be used for business expansion, a production facility, general working capital, and a special dividend.

The group, via wholly-owned unit Siangtronics Technology Sdn Bhd, entered into an agreement with manufacturer of industrial equipment SRM Integration (Malaysia) Sdn Bhd for the sale of the two-storey factory-cum-office building.

The property is situated within the Technoplex of the Bayan Lepas Industrial Park Phase 4. It has a total lettable space of approximately 2,203.48 square metres and is currently fully tenanted by Inno Instruments Sdn Bhd at a monthly rental of RM61,000 for industrial or office use for a term of three years which commenced on June 1, 2019 and will expire on May 31, 2022.

In a bourse filing, Elsoft said the disposal represents an opportunity for the group to immediately unlock the value and to monetise its investment in the property. This will in turn strengthen its liquidity and cash flow position.

The disposal is expected to generate an estimated net pro forma gain of approximately RM32.1 million, added the group.

The exercise is set to be completed in the fourth quarter of the year.

Elsoft shares closed at 89 sen on Wednesday, up 4.71% or four sen. The group's market capitalisation is some RM602.3 million.