Property developer YNH Property Bhd will sell Kiara 163 Retail Park and AEON Seri Manjung in a related-party transaction to ALX Asset Bhd for a total of RM422.5 million in cash.
ALX Asset will pay the proceeds from the sale of the malls - Kiara 163 Retail Park in Mont Kiara for RM270.5 million and AEON Seri Manjung in Perak for RM152 million - in cash by issuing medium-term notes (MTNs) as part of a proposed asset-backed medium-term notes (ABS MTN) programme with a nominal value of up to RM500 million.
YNH informed shareholders in an earlier report that the planned disposal was a related party transaction and that its chairman and executive director Yu Kuan Chon and MD Yu Kuan Huat had stayed out of all board discussions, meetings, and votes.
In a statement, YNH said that yesterday's extraordinary general meeting in Manjung saw shareholders approve the sale of the two assets.
Ching Nye Mi, an independent non-executive director of YNH, said that the proceeds from the disposal will be used to pay off bank loans, meet the group's need for operating capital, as well as to cover the cost of the aforementioned process.
"The disposal will generate an infusion of RM422.5 million into the YNH group and this will strengthen our balance sheet while allowing our group to gain more headroom to secure future funding required to finance other exciting projects within our landbank as well as kick-starting our flagship project, Menara YNH," he said.
This transaction is anticipated to result in a pro-forma net gain for YNH of roughly RM61 million, which should increase net assets and earnings.
Ching said that YNH is still confident about the future of the local real estate market and anticipates that its current assets in Perak will continue to generate rental income of roughly RM6.4 million annually.
"Our ongoing property development projects including Solasta Dutamas and future property development projects in Genting Highlands, are expected to contribute to the group's performance in the foreseeable future," he added.
