Sunway Bhd has proposed to dispose of certain land and assets for a cash consideration of RM550 million to Sunway Real Estate Investment Trust (Sunway REIT).
In a Bursa Malaysia filing, Sunway announced that its fully-owned subsidiary Sunway City Sdn Bhd had on 24 December entered into a conditional sales and purchase agreement with RHB Trustees Berhad, being the trustee of Sunway REIT, for the proposed disposal.
The move entails the disposal of three parcels of leasehold land within the Town of Sunway in Petaling Jaya, together with buildings comprising a 13-storey academic block, a six-storey academic block, a five-storey academic block, four blocks of five-storey walk up hostel apartment as well as sports facilities which include a football field, netball court, basketball court and tennis court.
Sunway believes the proposed disposal “will allow the group to unlock the value and realise its investment in the subject lands and buildings” and “result in an improvement in the earnings per share of the company by approximately 0.9 sen”.
It also expects the proceeds from the disposal to lead to a net cash inflow of RM311.3 million for the group.
Sunway revealed that it will use part of the proceeds “to repay existing bank borrowings, which is expected to reduce the gearing of Sunway Group and potentially save RM9.9 million of finance expense per annum”.
Image source: The Star
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