Albedo signs MOU to buy 308ha of land in Iskandar that will lead to reverse takeover

Catalist-listed Albedo, which trades in steel and other raw materials, wants to transform itself into a major real estate player.

It has entered into a non-binding framework agreement or memorandum of understanding (MOU) with Temasya Cergas to acquire five parcels of land in Iskandar, Malaysia, some 762 acres (308 ha)

Albedo will pay for the purchase through issuing new shares to Temasya that will result in a reverse takeover of the company by Temasya.

No amount was disclosed. The aim is to come up with a definitive agreement by Aug 30.

The parcels of land to be acquired are located in Gelang Patah.

It is accessible from Johor Bahru City via multiple access roads and also through the Tuas Second Link Expressway.

The freehold parcels, ranging in size from 29 acres to 279 acres, are earmarked for an integrated business park and mixed use development that includes commercial and residential.

Albedo said the diversification into real restate was prodded by intense competition and the softening of customers' demand for the group's trading and distribution businesses of steel related raw materials and consumables.

The pressure has eroded its profit margins and there is no respite in sight.

The board expects the group's existing core trading businesses to remain challenging.

The land acquisition, on the other hand, will provide it an opportunity to venture into new business areas which have the potential for growth, Albedo said.