KUALA LUMPUR (Oct 7): Chin Hin Group Property Bhd (KL:CHGP) said on Tuesday that its proposed disposal of four loss-making commercial vehicle and bodyworks subsidiaries and the earlier aborted sale of the same businesses were negotiated under different commercial terms and transaction structures.
"The current proposed disposals are subject to a different agreed transaction structure whereby bank borrowings, inter-company balances and shareholder loans are to be settled, and cash and cash equivalents are to be extracted prior to completion," it said.
These mechanisms were not part of the terms of the earlier disposal, which was negotiated on an ‘as is where is’ basis, Chin Hin Group Property added in responding to queries from Bursa Malaysia Securities on the proposed disposal.
In the aborted deal announced in August 2025, the group had proposed disposal of the four companies to N&K Resources (M) Sdn Bhd for a total consideration of RM74 million based on the unaudited net assets value as at May 31, 2025 of the companies of RM71.6 million, from which a gain before tax of RM2.4 million was expected.
In January this year, Chin Hin Group Property cancelled the sale of the four companies — Boon Koon Vehicles Industries Sdn Bhd (BKVI), BKCV Sdn Bhd, Boon Koon Fleet Management Sdn Bhd and BK Fleet Management Sdn Bhd (BFMS) — after the buyer failed to secure financing.
On Sept 30, the group announced a fresh proposal to sell the four companies for a combined RM62 million in cash to HSG Sdn Bhd, a holding company owned equally by four brothers — Datuk Seri Teoh Hai Hin, Teoh Hai Peng, Datuk Teoh Hai Bim and Teoh Hai Seng — each with a 25% stake.
In its filing on Tuesday, Chin Hin Group Property said the amount was derived based on the adjusted unaudited net asset value of the four companies as at June 30 of RM2 million and the agreed values of RM60 million for five related properties in Seberang Perai Selatan, Penang.
It said the bulk of its RM62 million consideration was derived from the five properties, which were valued at RM60 million by Henry Butcher Malaysia Sdn Bhd.
The independent registered valuer had valued the properties at RM60 million on Sept 15 using the cost and comparison approaches, the group said.
The five properties, owned by BKVI, comprise a freehold land with a total gross floor area of 21,622 sq metres comprising factory, office and warehouse buildings.
BKVI acquired the properties in October 1999 for RM10.61 million, including the land and existing factory building. Subsequently, BKVI incurred additional capital expenditure for a three-storey office building and further office extension.
Chin Hin Group Property said the share sale agreement with HSG is not subject to any conditions precedent.
The group had indicated that the total costs of investment for the subsidiaries are RM62.91 million.
On the repayment of inter-company balances, Chin Hin Group Property said it intended to utilise RM6.2 million to repay the amount owing to BKVI.
The group added that it does not expect the four companies to be in a deficit cash position upon completion of the disposal. Their cash and cash equivalents stood at RM7.34 million as at end-June and reduced to RM4.23 million as at end-September.
Regarding the query that the disposal was based on unaudited financial information as at June 30, 2026, instead of audited financial information as at end-Dec 2025, the company explained that negotiations for the current proposed disposal began in early August and that the unaudited financial information as at June 30 was considered more relevant and reflective of the target companies’ prevailing financial position than their audited financial information as at Dec 31, 2025.
Chin Hin Group Property also said the disposal of subsidiaries is not expected to have a material adverse impact on the group’s future financial performance given they contributed less than 10% of the group's total revenue.
The combined revenue of the subsidiaries stood at RM81.63 million in the financial year ended Dec 31, 2025 (FY2025), accounting for 8% of the group’s total revenue of RM976.75 million.
For the eight-month financial period ended Aug 31, 2026, the four companies recorded a combined revenue of RM30.70 million, or 6% of the group’s total revenue of RM505.90 million.