KUALA LUMPUR (May 12): UOA Development Bhd (KL:UOADEV) announced that its proposed RM200 million disposal of three properties in UOA Business Park to UOA Real Estate Investment Trust (KL:UOAREIT) has been called off after unitholders of the REIT did not approve the transaction.
In a Bursa Malaysia filing on Tuesday, the property developer said the conditional sales were not approved at UOA REIT’s adjourned unitholders’ meeting on April 29.
As a result, the condition precedent under the sales and purchase agreements (SPAs) was not met, leading to the rescission of the agreements.
UOA Development said the vendor had accepted the rescission on May 8.
The proposed disposal, announced in October last year, involved Tower 2A, Tower 2B and the car park at UOA Business Park near Subang Jaya, according to the company’s previous filings.
Under the original terms, the assets were to be sold by Everise Project Sdn Bhd, a 60%-owned subsidiary of UOA Development, to UOA REIT.
The transaction was expected to generate a net disposal gain of RM35.8 million for UOA Development, with proceeds earmarked for debt reduction, working capital and the development of a new adjacent commercial building.
The deal structure included cash payments for Towers 2A and 2B, while the carpark sale was to be satisfied through the issuance of 107.83 million new UOA REIT units at 83 sen apiece.
The transaction was classified as a related party-deal due to the involvement of common major shareholders and directors, namely Kong Chong Soon @ Chi Suim and Kong Pak Lim.
At noon break on Tuesday, UOA Development’s shares were down by one sen or 0.54% to RM1.85, giving it a market value of RM4.89 billion. Meanwhile, UOA REIT’s counter paused unchanged at 81.5 sen, while the REIT had a market capitalisation of RM550.6 million.