KUALA LUMPUR (Feb 5): YNH Property Bhd, whose share price has fallen off the cliff in recent weeks, explained that ALX Asset Bhd was not able to raise enough funds for the purchase of the former’s retail asset — 163 Retail Park.

Consequently, YNH had to terminate the RM270.5 million sale on Jan 26, about 14 months after YNH had sealed the deal. It also decided not to pursue the proposed RM152 million disposal of AEON Seri Manjung in Perak to ALX Asset Bhd in view of the situation.  

Nonetheless, the developer swiftly finds a buyer albeit at a lower price. It entered into a new deal to sell the Mont'Kiara shopping mall to Sunway Real Estate Investment Trust (Sunway REIT) for RM215 million cash. 

In a reply to Bursa Malaysia’s query, YNH explained that ALX Asset had not been able to raise enough funds via its asset-backed medium-term note (MTN) programme of up to RM500 million to purchase the retail mall.   

To recap, YNH announced a proposed asset securitisation exercise, which was expected to raise up to RM500 million fresh capital, in September 2022. 

The company then wanted to securitise its two retail malls, namely 163 Retail Park at Mont'Kiara, Kuala Lumpur, and AEON Seri Manjung in Perak. 

ALX Asset was incorporated to carry out the functions of a special-purpose vehicle in relation to the proposed asset-backed MTNs programme. It is a wholly-owned subsidiary of Premier SPV Management Sdn Bhd.

The deals with ALX Asset were deemed related party transactions as YNH executive chairman and major shareholder Datuk Dr Yu Kuan Chon was to 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. 

In the latest filing, YNH noted that its wholly-owned D’Kiara Place Sdn Bhd and ALX Asset had initially fulfilled conditions precedent for the deal last October, but the transaction failed to materialise due to ALX Asset’s first tranche of MTNs not being fully subscribed and thus did not have sufficient funds to proceed with the purchase. 

“Subsequent to the above, some of the conditions precedent fulfilled earlier had lapsed and D’Kiara Place and ALX Asset had on Jan 3, 2024, mutually agreed to extend the fulfilment date of the conditions precedent in the 163 Retail Park sales and purchase agreement (SPA) for one month until Feb 4, 2024,” the company said in a bourse filing.  

However, the SPA with ALX Asset was terminated on Jan 26, which made way for the subsequent agreement to sell the seven-storey mall to Sunway REIT on Jan 29.

“There are no liquidated damages or penalties that the company needs to compensate [concerning the SPA with ALX Asset],” it added. 

Shares in YNH ended three sen or 4.55% lower at 63 sen, giving the group a market capitalisation of RM333.27 million. Year to date, the stock has plunged 85%.