KUALA LUMPUR (May 29): Tanco Holdings Bhd (KL:TANCO) is proposing up to RM250 million in financial assistance to its joint venture with Menteri Besar Negeri Sembilan (Incorporated) (MBINS) for the acquisition of land and development of an industrial park in Port Dickson.

This includes RM88.5 million for land purchase, RM4.64 million for incidental acquisition costs, RM150 million for estimated first-phase development costs, and RM6.87 million for contingencies, the property developer said in a filing with Bursa Malaysia on Friday.

In October 2024, Tanco announced that its 80%-indirect subsidiary Tanco Land Sdn Bhd (TLSB) is forming an 80:20 joint venture with MBINS to develop the Port Dickson Free Zone (PDFZ), which will be built on about 575 acres of land currently owned by SD Guthrie Bhd (KL:SDG).

The PDFZ project will comprise warehouses, factories and supporting infrastructure, and is to be developed in phases.

MBINS subsequently entered into an agreement with SD Guthrie in June 2025 for the acquisition of the land for RM88.5 million. Under the arrangement, MBINS will acquire the land and hold it on behalf of the joint-venture company, PDFZ Sdn Bhd, before transferring it back upon completion of the acquisition. TLSB, meanwhile, will be primarily responsible for arranging funding and financing for PDFZ to fund both the land acquisition and development of the project.

On Friday, Tanco said the financial assistance of up to RM20 million will be provided in the form of shareholder advances and corporate guarantees for bank borrowings to be raised by PDFZ, depending on financing requirements.

The group said the composition between shareholder advances and guarantees has yet to be determined and will depend on the level of external financing secured by the project company.

Tanco said the availability of funding to PDFZ would avoid unnecessary delays and facilitate timely completion of the first phase of the project, which is expected to contribute positively to the group’s future earnings.

Tanco said the proposed financial assistance and land acquisition are subject to shareholders’ approval at an extraordinary general meeting to be convened.

Subject to all approvals being obtained, the land acquisition is expected to be completed in the second half of 2026.

Tanco shares ended one sen, or 0.6%, higher at RM1.75 on Friday, giving the group a market capitalisation of RM10.7 billion.