This article first appeared in The Edge Malaysia Weekly on February 10, 2025 - February 16, 2025

PUAN Sri Thong Nyok Choo, widow of the late Tan Sri Chan Ah Chye @ Chan Chong Yoon, is understood to be close to selling a block of her controlling 29.5% stake in property developer Talam Transform Bhd (KL:TALAMT), sources familiar with the matter tell The Edge.

It is understood that at least two parties have expressed interest in the block of shares with a deal likely to be inked soon.

One of the parties is said to be Tan Sri Clement Hii Chii Kok, who has 56.25% equity interest in property developer HCK Capital Bhd (KL:HCK), and a stake of about 60% in SEG International Bhd (KL:SEG), which operates higher education learning centres. The other could be a bumiputera party with some interest in the property sector, but details are scarce.

Neither Thong nor Hii could be reached for comment. Talam was not approached for a comment as the talks are understood to be being undertaken at a shareholder level.

“Other than Hii, there is another party that is interested, says a source.

“Thong has been looking to sell her stake in Talam for some time now. Actually, she has been looking to exit Talam ever since Chan passed away.”

Chan died in mid-June last year at the age of 78.

Hii is understood to have had talks with Thong and the talks have been progressing well, another source says. “It’s been going back and forth and Talam, or Thong, is supposed to revert with some answers, after which a decision can be made,” he says.

The Edge understands that the parties interested in Talam were waiting for a five-for-one share consolidation, from 4.72 billion shares into 944.85 million shares, to be concluded before moving forward with their plans. The share consolidation was completed recently on Feb 5.

Apart from Thong, the only other substantial shareholders in Talam are Loy Boon Chen and Liau Yoke Leang, who have 9.09% equity interest in the company via Prestigious Performance Sdn Bhd.

Talam owns several parcels of land, including a 66.78-acre tract for the development of residential and commercial properties in Puchong, which has a net book value of RM109.6 million; 183.08 acres in Bukit Beruntung earmarked for residential and industrial development, with a net book value of RM88.1 million; and 50 acres slated for a mixed-use development in Gombak, with a net book value of RM70 million. There are several other parcels as well. Talam’s total assets as at Sept 30, 2024 were worth RM626.18 million.

In Talam’s FY2024 annual report, however, it is stated that RM188.83 million of the company’s properties have been pledged as security to IJM Corp Bhd (KL:IJM) and pegged at an interest rate of 6.5% a year. The annual report also states that Talam has payables of almost RM256 million to IJM due by May 2026, after the initial deadline for repayment was extended from May 2024. The plan is to partially settle the amount and charge properties to IJM as collateral for the balance.

As part of this settlement, Talam announced last August that it was looking to dispose of a 27.72-acre tract in Sepang to IJM for RM84 million — as partial debt repayment, clearing RM66 million of indebtedness and a RM18 million interest waiver on the debt owed.

The proposed disposal was approved at a shareholders’ meeting last month.

Talam has its own set of long-standing issues. For the nine months ended September 2024, the company suffered a net loss of RM10.8 million on revenue of RM6.04 million. It has suffered 11 straight quarters of losses and bled red ink for 10 straight financial years.

As at Sept 30, 2024, Talam had cash and bank balances of only RM5.95 million, but its short-term borrowings stood at RM44.84 million, resulting in a net gearing ratio of 0.17 times. Talam’s accumulated losses as at Sept 30, 2024 amounted to RM635.18 million.

On its prospects, Talam says, “The group’s joint-venture projects are ongoing, albeit at a slow pace because of the soft property market. In addition, the group has submitted new development plans for various parcels of land, some of which have already been approved by the relevant authorities. The group is cautiously reassessing the take-up rate, however, owing to the weak property market, tight liquidity of potential buyers and tough bank lending policies, especially to the B40 category.”

Talam’s stock closed at 12 sen last Friday, translating into a market capitalisation of RM113.4 million. 

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