Bursa Securities had 26 queries about YNH Property Bhd's land sale in Desa Sri Hartmas to Sunway Bhd's wholly-owned subsidiary Sunway Living Space Sdn Bhd for RM170 million cash.
Kar Sin Bhd, YNH's wholly owned subsidiary, entered into a sale and purchase agreement (SPA) with Sunway Living Space on May 12 to sell a 2.06-hectares plot of land in Sri Hartamas.
According to a May 19 stock exchange filing, Bursa first requested a brief background on the tripartite partnership between Kar Sin, Imbuhan Sempurna Sdn Bhd, and Great Wall Park Sdn Bhd from YNH.
Bursa then raised many questions, including how the RM170 million disposal consideration was calculated, other than on a willing-buyer and willing-seller basis, given that no valuation of the property was performed.
YNH noted in its response to Bursa that the RM170 million acquisition consideration and the key terms are the results of direct negotiations between the company and Sunway "based on the respective parties' intention to maximise their respective benefits and gains."
Bursa then questioned YNH on how the disposal consideration could potentially increase by RM50 million to RM220 million.
YNH explained that the SPA dated May 12, 2023, includes an extra consideration of RM50 million if it obtains a new development order (NDO) within one year of the agreement's date.
"The revised percentage ratio after taking into consideration the sum of RM50 million is 17.885 per cent," it said.
The company said that the NDO will contain appropriate authority clearance for a development with a minimum plot ratio of seven on the net land area (NLA).
The land already has a DO for a minimum plot ratio of five on the NLA.
YNH told the stock exchange on May 16 that the disposal will still proceed even if it fails to get the NDO within the stipulated time frame.
The proposed transaction is subject to approval by the shareholders of YNH, Kar Sin, and Sunway Living Space, among others, and is expected to .conclude in the fourth quarter of 2023.
YNH said that the net proceeds from the sale are planned to be used for YNH and its group of companies operating capital within 24 months.
Source: NST.com.myPrev. Article Next Article