YNH Property Bhd (YNH) has clarified that its proposed landbank disposal for RM170 mil cash as per announced earlier today comes with an additional consideration RM50 mil if it can successfully obtain a new development order (NDO) within one year from the date of the sales and purchase agreement (SPA).
The NDO would include the approval by the relevant authorities for a development with a minimum plot ratio of seven on the net land area, according to its general manager James Ngio (pic below).
“The additional RM50 mil acts as an incentive for our group to obtain an NDO for the purchasers,” Ngio pointed out in a media statement.
“We had agreed with this additional clause because we are confident that we will be able to obtain the new development order leveraging on our track record and expertise in this area as well as the strategic location of the landbank. Naturally, the value of this landbank will increase with an NDO.”
To re-cap, the latest statement is to clarify YNH’s filing to Bursa Malaysia this morning on the proposed disposal of its freehold vacant land located in Desa Sri Hartamas, Kuala Lumpur.
This where the group through its wholly owned subsidiary Kar Sin Bhd has inked a SPA with Imbuhan Sempurna Sdn Bhd, Great Wall Park Sdn Bhd and Sunway Living Space Sdn Bhd for the disposal of a landbank of 5,098-acre.
YNH further clarified that the additional sum of RM50 mil would be paid to the lawyers of the purchasing parties (as stakeholders) and will be disbursed to YNH upon fulfilling the additional consideration clause.
“The proposed disposal provides an opportunity for YNH to realise and unlock the value of its investment while strengthening the group’s liquidity and cash flow position,” explained Ngio.
“We intend to utilise the proceeds to repay bank borrowing and working capital, resulting in interest saving of RM3.77 mil per annum. This is expected to further reduce the gearing ratio of YNH.”
More broadly, the proposed disposal will result in an estimated gain of circa RM2.6 mil to the YNH Group after taking into consideration the estimated expenses of RM800,000 in relation to the proposed disposal.
The proposed disposal is also not expected to have any material effect on the issued share capital and the substantial shareholders’ shareholdings of YNH as the disposal consideration shall be fully satisfied via cash and does not involve any issuance of new ordinary shares in YNH.
In its filing to Bursa Malaysia, YNH also disclosed that the proposed disposal is not subject to the approval of shareholders of the company or other relevant authorities and that the directors and major shareholders of YNH do not have any interest whether direct or indirect.
At the close of today’s trading, YNH was up 8 sen or 1.66% to RM4.90 with 69,900 shares traded, thus valuing the company at RM2.59 bil. – May 16, 2023
