KUALA LUMPUR (Jan 29): YNH Property Bhd is now planning to sell its Mont Kiara shopping mall, 163 Retail Park, to Sunway Real Estate Investment Trust (Sunway REIT) for RM215 million, cash.
In a bourse filing on Monday, YNH said its wholly-owned D’Kiara Place Sdn Bhd has inked a sale and purchase agreement with RHB Trustees Bhd, the trustee of Sunway REIT, for the sale of the seven-storey retail shopping centre.
YNH had previously inked an agreement in November 2022 to sell the mall for RM270.5 million — together with the AEON Seri Manjung in Perak for RM152 million — to ALX Asset Bhd, who would issue medium-term notes (MTNs) under a proposed asset-backed debt programme of up to RM500 million in nominal value to fund the all-cash deal.
The disposals were deemed related party transactions as under the asset-backed MTN programme, YNH executive chairman and major shareholder Datuk Dr Yu Kuan Chon would subscribe to the first tranche of the junior MTNs. Kuan Chon’s brother, Datuk Yu Kuan Huat, who is the managing director of YNH, was also deemed interested in the disposals.
However, the disposal of 163 Retail Park to ALX Asset was terminated last Friday, YNH said, due to the fact that the deal had yet to be completed.
“The proposed disposal represents an opportunity for the group to unlock the value of monetising its investments in the property,” YNH said of its new plan to sell the asset to Sunway REIT.
Of the proceeds, RM110.94 million will be used to redeem the property from its chargee, Public Bank Bhd. Another RM74.06 million will be used for the group's working capital, while RM30 million will go towards the repayment of borrowings.
“The group is expected to record a pro forma net loss of approximately RM12.04 million after accounting for the reversal of deferred tax, which is no longer required as there is no capital gains tax applicable for the disposal of property, from the proposed disposal,” the group said, noting that the property had an audited carrying amount of RM234.69 million as at end-June 2023.
The five-year-old 163 Retail Park has a net lettable space of 255,535 sq ft, with an approximate occupancy rate of 93.99%, according to the group.
The proposed disposal is expected to be completed by the second quarter of 2024 (2Q2024), subject to approval being obtained at the group’s forthcoming extraordinary general meeting.
Last week, after being hit with an unusual market activity (UMA) query from Bursa Malaysia Securities, YNH told the bourse regulator that it had received offers for the Mont Kiara shopping mall and would make an announcement once a decision has been made and the terms finalised.
YNH, as well as Rapid Synergy Bhd and Imaspro Corp Bhd, all three stocks linked to Kuan Chon, have come under selling pressure since late last year. YNH has lost over 83% of its value from about RM5, where it had been hovering for almost half a year after hitting a record high of RM5.20 in May.
The stock closed at 84.5 sen on Monday, up 13 sen or 18.18% from last Friday's close, giving the group a market capitalisation of RM443.9 million.
Units of Sunway REIT closed two sen or 1.29% higher at RM1.57, valuing the REIT at RM5.38 billion.