The leasehold property has a remaining land tenure of about 56 years expiring on Jan 25, 2075.
In a Wednesday filing, ecoWise said the property will increase the production capacity of rubber compound and rethreaded tyres, boosting its production efficiency through economies of scale.
On Tuesday, ecoWise’s wholly owned subsidiary, Sunrich Integrated signed an option to purchase (OTP) with Rahang Rubber Industries for the proposed acquisition. The OTP expires in two weeks.
The RM13 million consideration took into account, among other things, the property's market value of RM14 million based on a Aug 26 valuation report by Rahim & Co International.
ecoWise will finance the proposed acquisition with internal funds.
For the 2Q ended April, ecoWise reported losses shrunk 68% to $163,000 from a year ago while revenue fell 9% to $13.6 million.
As at 11.50am, shares in ecoWise are trading 0.3 cent higher at 2.4 cents.
