KUALA LUMPUR (Sept 21): Iconic Worldwide Bhd will be acquiring a 5.53-acre plot of land in Penang for RM12.53 million as part of its expansion into the personal protective equipment (PPE) business.

In a bourse filing, the company, which is involved in property development, hotel management, hospitality and healthcare supplies, announced that its wholly-owned unit Iconic Medicare Sdn Bhd had signed a sale and purchase agreement (SPA) with Penang Development Corp to acquire the leasehold land, located in Batu Kawan Industrial Park.

Under the SPA, the land or any buildings erected upon it can only be used for the manufacture and distribution of rubber gloves and face masks, subject to Icon Worldwide getting the necessary approvals.

The land’s price was arrived at on a “willing buyer, willing seller” basis. The purchase will be funded through internally-generated funds and/or external borrowings.

According to Iconic Worldwide, the land purchase paves the way for the construction of a new manufacturing facility to produce PPE, which will contribute a new revenue stream for the group.

“The setting up of the manufacturing facility will also contribute towards the improvements in the socio-economic environment by creating job opportunities for the employment market which is currently affected by prolonged effects of the COVID-19 pandemic,” the group added.

The acquisition is expected to be completed by the end of the fourth quarter ending March 31, 2021 (4QFY21).

While the purchase does not require shareholder approval, it is contingent on the Penang State government consenting to the sale within six months of today and the land title being issued within 12 months from when approval is granted.

On Sept 2, the group announced plans to diversify into PPE manufacturing for a total investment cost of RM155.5 million — covering the cost of land, the construction of a new facility, the installation of production lines, other equipment and working capital.

Shares in Iconic Worldwide finished 1.92% or a sen lower at 51 sen today, valuing it at some RM165.09 million. It saw 3.44 million shares traded today.