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PETALING JAYA (May 4): Tropicana Corp Bhd has clarified to Bursa Malaysia that its four-month delay in announcing a RM44.82 million leasehold land acquisition in Langkawi was due to the parcel's strategic dependence on a separate, larger acquisition — and that had the bigger deal fallen through, Tropicana would likely have walked away from both.
In a reply to a query letter from Bursa Malaysia's Listing Group Regulation dated April 30, this year, Tropicana said the sale and purchase agreement (SPA) for the 3.12-acre Tanjung Mali parcel — entered into on Dec 29, 2025 through wholly-owned subsidiary Tropicana Scenic Development Sdn Bhd (TSDSB) — was deliberately withheld from announcement until April 28 to coincide with finalisation of a neighbouring 21.03-acre acquisition from Maya Elemen Sdn Bhd (MESB) for RM151.06 million.
"On a standalone basis, the Tanjung Mali land was deemed too small to be commercially viable for the Group's intended sustainable residential and agro-tourism development," the company said in its reply filed today (May 4).
Main Market-listed Tropicana said management had taken a "prudent position" that the Tanjung Mali acquisition would only proceed if the MESB transaction was certain — given the larger deal's complexity, involving the coordination of 14 land titles and Malay Reserve land restrictions.
"Had the MESB transaction failed to materialise, the Company likely would have exercised its rights to withdraw from or terminate the Tanjung Mali SPA to avoid being left with a non-viable, isolated plot," Tropicana said.
Payment structure and conditions precedent
Under the SPA, the RM44.82 million purchase consideration is structured across three tranches: a deposit of RM8.964 million paid prior to the SPA date, a second payment of RM26.892 million upon signing, and a final payment of RM8.964 million within 14 days of the unconditional date.
The remaining 20% final tranche is targeted for settlement in 4Q2026, subject to fulfilment of conditions precedent (CPs).
The SPA is conditional upon both parties obtaining all required corporate and internal approvals, and the vendor — Tanjung Mali Resort Development Sdn Bhd (TMRDSB) — obtaining state authority approval for the land transfer.
These CPs must be fulfilled within five months of the SPA date, with the purchaser having sole discretion to extend by one additional month.
Tropicana confirmed that as of the date of reply, no CPs have yet been fulfilled.
On default, if Tropicana fails to pay the balance purchase price, TMRDSB may terminate the SPA and forfeit 10% of the purchase consideration as agreed liquidated damages.
Conversely, if TMRDSB defaults, Tropicana may seek specific performance or terminate the SPA and claim 10% of the purchase consideration as liquidated damages, with all monies paid — including the deposit — refunded within 14 days without interest.
Valuation and comparable transactions
The land was valued by Firdaus & Associates Property Professionals Sdn Bhd, with the valuation dated Dec 5, 2025.
Four comparable transactions were considered by the valuer: a 1.82-acre commercial land parcel in Batu Feringghi, Penang transacted at RM594.23 psf in April 2025; a 2.47-acre commercial parcel on Pulau Rabak Kecil, Langkawi at RM111.28 psf in February 2025; a 9.85-acre parcel at Teluk Burau, Langkawi at RM309.53 psf in June 2024; and an 8.2-acre parcel in Georgetown, Penang at RM587.53 psf in October 2023.
The land carries a net book value of RM19.8 million as at Dec 31, 2024 and is currently free from encumbrances.
Development timeline and related party interest
Tropicana said it expects to commence development on the Tanjung Mali parcel by 4Q2026, upon fulfilment of the CPs, with the acquisition targeted for full implementation by July 15, this year.
The intended development concept is sustainable residential and agro-tourism, consistent with the broader strategy outlined for the combined Langkawi landholding.
On the related party dimension, Tropicana clarified that its founder and major shareholder Tan Sri (Danny) Tan Chee Sing's interest in the proposed acquisition arises from a financing arrangement between TMRDSB — the vendor — and Tan himself, whereby payments made by Tan to TMRDSB were applied as settlement on financing between the two parties.
Tropicana confirmed there are no other related party transactions with TMRDSB or the interested parties named in Section 8 of the original announcement for the preceding 12 months beyond the two transactions announced on April 28.
TMRDSB's substantial shareholders are Shahril Abdul Salam (99.8%), Abdul Razak Mohd Omar (0.1%) and Tajudin Mohd Yusuff (0.1%), who also serve as its directors.
Board and audit committee oversight
Tropicana confirmed that the board of directors and audit committee of the listed entity were formally briefed on the full commercial terms of the transaction only on April 28 — the date of announcement — as the transaction had been executed at the subsidiary level pending resolution of title complexities and land-use verifications.
The board relied on a discounted market valuation from Firdaus & Associates and the group's established track record in Langkawi, citing the successful Tropicana Cenang development, in concluding the acquisition was commercially justified.
The SPA and valuation report are available for inspection at Tropicana's registered office at Unit 1301, Level 13, Tropicana Gardens Office Tower, No. 2A, Persiaran Surian, Tropicana Indah, 47810 Petaling Jaya, Selangor.
Source: Tropicana Corp Bhd reply to Bursa Malaysia query letter, dated today (May 4). The combined Langkawi acquisition of RM195.88 million was first reported by EdgeProp on April 28.
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