The risk factor associated with the Acquisition include amongst others, the following:
(a) Non-Completion Risk / Delay in Completion
The completion of the Acquisition is subject to the fulfillment of conditions precedent set out in the SPA, including obtaining the written consent from K.K.I.P. Sdn. Bhd. (the Developer) for the Deed of Assignment and confirming the redemption/discharge arrangements with the existing Master Title chargee (Affin Bank Berhad). Should there be any delay or inability to obtain the requisite developer consent or redemption statement in a timely manner, the completion of the Acquisition may be delayed or may not materialize within the estimated timeframe (first half of 2027).
(b) Financing and Interest Rate Risk
The Purchase Price is intended to be satisfied via internally generated funds and/or bank borrowings. If bank borrowings are utilized, any increase in interest rates or tightening of credit conditions by financial institutions may increase the Group's borrowing costs. Additionally, in the event of any delay in securing bank financing within the Balance Payment Period, interest charges (at 8.0% per annum on a daily basis during the Further Extended Period) or potential default consequences under the terms of the SPA may be incurred.
(c) Developer and Master Title Risk
As the Property's individual title forms part of a Master Title under Country Lease No. 045339320, the issuance and registration of a separate individual title for Lot 23A are dependent on the Developer and relevant land authorities. Any delay in the subdivision or issue of individual title, or unforeseen liabilities linked to the Master Title prior to full discharge, could impact the timing of ownership registration.
(d) Property Development and Operational Risk
The Group intends to utilize the vacant industrial land to expand its warehousing capacity and FMCG distribution network in Sabah. Subsequent development of the site will require approvals from relevant local authorities (e.g., building plans, planning permissions, environmental assessments, and Certificate of Completion and Compliance). Any cost overruns, construction delays, or regulatory hurdles during site development could adversely affect the Group's timeline for operationalizing the facility and realizing its intended synergy.
(e) Macroeconomic and Business Environment Risk
The Group's future operations and growth prospects in East Malaysia are subject to general economic conditions, market demand for FMCG products, fluctuations in logistics costs, and regional industrial property supply/demand dynamics. Any adverse changes in the macroeconomic environment in Sabah could affect the anticipated strategic benefits of expanding the Group's presence in the region.