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TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONS M K LAND HOLDINGS BERHAD ("M K LAND" OR "THE COMPANY") - DISPOSAL OF TWO PARCELS OF LEASEHOLD LANDS MEASURING APPROXIMATELY 224,580 SQUARE METRES LOCATED AT DISTRICT OF KUALA LUMPUR, NEGERI WILAYAH PERSEKUTUAN KL OWNED BY MEDAN PRESTASI SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF M K LAND FOR A TOTAL CASH CONSIDERATION OF RM108,781,155.00 ("DISPOSAL")

MK LAND HOLDINGS BERHAD

Type Announcement
Subject TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS)
NON RELATED PARTY TRANSACTIONS
Description
M K LAND HOLDINGS BERHAD ("M K LAND" OR "THE COMPANY") - DISPOSAL OF TWO PARCELS OF LEASEHOLD LANDS MEASURING APPROXIMATELY 224,580 SQUARE METRES LOCATED AT DISTRICT OF KUALA LUMPUR, NEGERI WILAYAH PERSEKUTUAN KL OWNED BY MEDAN PRESTASI SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF M K LAND FOR A TOTAL CASH CONSIDERATION OF RM108,781,155.00 ("DISPOSAL")

1.  INTRODUCTION

The Board of Directors of M K Land wishes to announce that Medan Prestasi Sdn. Bhd. (Registration No. 199501010614)(339815-X) (“MPSB”), a wholly-owned subsidiary of M K Land had on 26 February 2021 entered into a Sale and Purchase Agreement (“SPA”) with Hexaleap Sdn. Bhd. (Registration No. 202001005989) (1362309-T) (“ the Purchaser”) for the disposal of two (2) parcels of leasehold land for a total cash consideration of RM108,781,155.00 (“Disposal Consideration”) as follows:

 

(a)  PN 49024 Lot 5113 in Mukim of Ulu Kelang, District of Kuala Lumpur, Negeri Wilayah Persekutuan KL measuring approximately 129,300 square metres in area (“Land 1”); and

(b)  PN 42440 Lot 28268 in Mukim of Setapak, District of Kuala Lumpur, Negeri Wilayah Persekutuan KL measuring approximately 95,280 square metres in area (“Land 2”).

 

Land 1 and Land 2 are collectively referred to as the “Land”.

 

2.  DETAILS OF THE DISPOSAL

Subject to the terms and conditions of the SPA, MPSB agreed to sell and the Purchaser has agreed to purchase the Land free from all encumbrances and with vacant possession on an as is where is basis and in its present state and condition and with vacant possession but subject to consent of the Jawatankuasa Kerja Tanah Wilayah Persekutuan (“Relevant Authority”) for a total cash consideration of RM108,781,155.00.

 

2.1  Background information on Medan Prestasi Sdn Bhd

MPSB is a private limited company incorporated in Malaysia and having a total amount of issued share capital of RM9,000,000.00. MPSB is a wholly-owned subsidiary of M K Land. The principal activities of MPSB are property development, property investment and investment holding.

 

The Directors of MPSB are as follows:

(a)  Pn Hjh Felina Binti Tan Sri Datuk (Dr.) Hj Mustapha Kamal; and

(b)  En Kamarulzaman Bin Abu Bakar.

 

2.2  Background Information on the Purchaser

The Purchaser is a private limited company incorporated in Malaysia on 20 February 2020 with its registered office at No. 7-1, Jalan 109F, Plaza Danau 2, Taman Danau Desa, 58100 Kuala Lumpur. It has an issued share capital of RM1. The principal activity of the Purchaser is Property Development.

 

The Directors and Shareholders of the Purchaser are as follows:

Directors :

1.  Datuk Gregory Amos Yoon Peng Sum;

2.  Wan Nasir Bin Wan Mustafha.

Shareholders

The Purchaser is a wholly owned subsidiary of Paragrene Land Sdn. Bhd. Incorporated on 28 August 1996 and having a total total paid up share capital of RM105,479,500.00,

 

Paragrene Land Sdn Bhd is a Property Developer in Greater Klang Valley with its principal place of business at No. 9.07, Amcorp Tower B, Amcorp Trade Centre, 18, Persiaran Barat, 46050 Petaling Jaya, Selangor.

 

3.  INFORMATION ON THE LAND

The details of the Land are set out as follows:

 

 a.  Particulars of the Title of Land 1:

Title no.

Existing Use

Location

Land Area

(square metres)

Lease expiry date

PN 49024

Lot 5113

 

 

Vacant land for  development

Mukim of Ulu Kelang, District of Kuala Lumpur, Negeri Wilayah Persekutuan KL

129,300

09 November 2083

                       

Particulars of Title of Land 2:

Title no.

 

Existing Use

Location

Land Area

(square metres)

Lease expiry date

PN 42440 Lot 28268

 

 

Vacant land for  development

Mukim of Setapak, District of Kuala Lumpur, Negeri Wilayah Persekutuan KL

95,280

09 November 2083

                       

Both Land 1 and Land 2 are contiguous to each other, and are valued together by the independent valuer as one (1) parcel.

 

b.  Restrictions-in-interest: Each of the Issue Document of Title is subject to the following restrictions-in-interest:

“Tanah ini tidak boleh dipindahmilik, dipajak, dicagar atau digadai melainkan dengan kebenaran Jawatankuasa Kerja Tanah Wilayah Persekutuan Kuala Lumpur.”

 

c.  Encumbrances: The Land is free from encumbrances and is currently not charged to any banks or financial institutions.

 

d.  Net book value of the Land, carried at fair value based on audited financial statement as at 30 June 2020 was RM51,335,710.00.

 

Based on the valuation by an independent valuer, namely Messrs TD Aziz Sdn. Bhd. (“the Valuer”) on 24 February 2021, the current market value of the Land is RM97.0 million. The Valuer has adopted the Comparison Method in arriving at the market value or fair value of the Land.

 

4.  BASIS OF ARRIVING AT AND JUSTIFICATION FOR THE DISPOSAL CONSIDERATION

The Disposal Consideration is arrived at after negotiation on a “willing buyer willing seller” basis and after taking into consideration that the Disposal Consideration gives a premium of approximately 12.1% above the market value of the Land as appraised by the Valuer.

 

The Disposal Consideration will be satisfied in the following manner:

Initial

Deposit (RM)

Balance Deposit (RM)

1st Part Payment

(7% of Disposal Consideration (RM)

2nd Part Payment

 (8% of Disposal Consideration (RM)

Final Payment

(75% of Disposal Consideration (RM)

 

 

Total (RM)

3,263,434.65(1)

7,614,680.85(2)

7,614,680.85(3)

8,702,492.40(4)

81,585,866.25(5)

108,781,155.00

 

Notes:

(1)  The initial deposit has been paid upon execution of the SPA i.e. 26 February 2021.

(2)  The balance deposit (“Balance Deposit”) shall be satisfied within the period of 4 months from the date of SPA (“Due Date”).

(3)  The 1st Part Payment (“1st Part Payment”) shall be satisfied within the period of 7 months from the date of SPA (“1st Payment Date”).

(4)  The 2nd Part Payment (“2nd Part Payment”) shall be satisfied within the period of 9 months from the date of SPA (“2nd Payment Date”).

(5)  The Final Payment (“Final Payment”) shall be satisfied within the period of 12 months from the date of SPA (“Completion Date”).

 

The 1st Part Payment, 2nd Part Payment and Final Payment shall collectively be referred to as “Balance Purchase Price”.

 

5.  SALIENT TERMS OF THE SPA

 

5.1  Conditions Precedent

 

5.1.1  Restriction in Interest

The Individual Titles to the Land are endorsed with such restrictions-in-interest that the Land shall not be transferred, leased or charged without the consent of the the Relevant Authority.

 

5.1.2   Application to Transfer

 

(a)  MPSB shall submit all applications required to obtain the letter of consent to transfer the Land in favour of the Purchaser ("the Consent") within thirty (30)  days from the date of payment of the Initial Deposit by the Purchaser to MPSB in accordance with the SPA ("the Consent Application Date") and MPSB shall obtain the Consent within six (6) Months from the Consent Application Date ("the Consent Period") and within seven (7) days of receipt of the Consent, MPSB shall notify the Purchaser and/or the Purchaser's solicitors ("the Consent Notice").

 

(b)  In the event the Consent is not obtained within the Consent Period, the Purchaser may grant a further extension of three (3) months from the expiry of the Consent Period or such further period or periods as the Purchaser may grant to MPSB at the Purchaser’s absolute discretion to enable MPSB to obtain the Consent.

 

(c)  MPSB and the Purchaser shall use their best endeavours to assist one another to apply for and obtain the Consent. Each party shall forthwith upon receipt of written notice from the other party, furnish such information and/or documents within the knowledge and control of the party and necessary for applying for and obtaining the Consent.

 

(d)  MPSB agrees and covenants to expeditiously take all steps and use their best endeavour to do all things as may be required of MPSB to apply for and obtain the Consent.

 

(e)  All costs and expenses including legal fees in relation to the application for Consent shall be borne by MPSB. MPSB's solicitors shall forward the original copy of the Consent to the Purchaser's solicitors, upon issuance of the Consent Notice.

 

5.1.3  Failure To Obtain Consent

 

(a)  MPSB and the Purchaser have agreed that in the event the Consent cannot be obtained on or before the expiry of the Consent Period or the Extended Consent Period, as the case may be, through no default of the parties herein, the Purchaser shall be entitled to terminate the SPA by a notice in writing whereupon the following consequences shall ensue:-

 

(i)  all monies paid by the Purchaser to MPSB respectively, towards the Disposal Consideration (if any) shall be refunded free of interest to the Purchaser within thirty (30) days from the date of the termination notice failing which MPSB shall respectively, pay interest thereon at the rate of six (6%) per centum per annum calculated at daily rests commencing from the day next after the expiry of the aforesaid time limit to the date of receipt by the Purchaser or the Purchaser's solicitors of such monies; and

 

(ii)  the SPA shall be rendered as null and void and both MPSB and the Purchaser, shall have no further claim or claims whatsoever against each other save for any antecedent breach of the SPA and the Purchaser undertakes to return the following to MPSB:-

 

(aa)  vacant possession to the Land (if vacant possession has been delivered to the Purchaser);

(bb)  a valid and registrable withdrawal of caveat (if the Purchaser had lodged a caveat over the Land together with the requisite registration fee); and

(cc)  the original issue document of titles to the Land together with the original plans attached thereto and other necessary documents required to transfer the Land in favour of the Purchaser (“Relevant Documents”) (if the same or any had been delivered to the Purchaser or the Purchaser's Solicitors) with MPSB’s interest intact.

 

(b)  In the event the Consent is rejected by the Relevant Authority for whatsoever reasons through no fault of the parties herein, MPSB and/or the Purchaser shall be entitled to appeal to the Relevant Authority and any appeals as aforesaid shall be filed within fourteen (14) working days of the said rejection of the Consent being notified to the parties.

 

(c)  Notwithstanding anything in the SPA, it is agreed that in the event the Consent is not obtained within the time stipulated in the SPA due to the intentional gross wilful default of MPSB, the Purchaser shall be entitled to pursue an action for specific performance of the SPA and all costs and expenses incurred by the Purchaser in connection therewith in bringing such action shall be borne and paid by MPSB, without prejudice to all other rights of action available to the Purchaser.

 

5.1.4  SPA being Unconditional

The SPA shall become unconditional on the date of the Purchaser’s solicitors’ receipt of the Consent Notice.

 

5.2  Limited Power of Attorney

 

5.2.1  MPSB agrees to grant a limited power of attorney to the Purchaser for the purposes stipulated in the deed of limited power of attorney (“Limited Power of Attorney”) to be executed by the parties. The Limited Power of Attorney shall be duly executed in escrow by MPSB upon execution of this Agreement and the same shall be deposited with MPSB’s solicitors as stakeholders.

 

5.2.2  Upon full payment of the Deposit Sum by the Purchaser to the MPSB, MPSB's solicitors shall be irrevocably authorised to release the Limited Power of Attorney to the Purchaser.

 

5.2.3  In consideration of MPSB granting the Limited Power of Attorney to the Purchaser in accordance to the terms of the SPA, the Purchaser hereby agrees to indemnify and keep MPSB indemnified against all costs, damages, losses, fines and/or penalties as may be suffered by MPSB as a result of all and/or any actions undertaken by the Purchaser pursuant to the Limited Power of Attorney in relation to the Land which has adversely affected MPSB.

 

5.3  Vacant Possession

Vacant possession to the Land, free of any squatters, shall be delivered to the Purchaser on an “as is where is” basis within seven (7) working days from payment of the full Disposal Consideration, interest on late payment (if applicable) and the apportionment charges to MPSB and/or MPSB's solicitors as stakeholders.

 

In the event that MPSB shall fail to deliver vacant possession of the Land to the Purchaser, MPSB shall pay liquidated damages to the Purchaser calculated at six per centum (6%) per annum on the Disposal Consideration, on daily rests, for any day of delay in such delivery of vacant possession without prejudice to all other rights of action and remedies available to the Purchaser.

 

6.  LIABILITIES TO BE ASSUMED

There are no liabilities, including contingent liabilities, in relation to the Disposal which remain with M K Land, and no guarantee is provided by M K Land to the Purchaser.

 

7.  ORIGINAL COST OF THE PROPERTIES

The original cost and date of acquisition of the Land by MPSB are as follows:

 

Date of acquisition

Land

Title No.

Original Cost of Investment (RM)

31 January 2005

Land 1

PN 49024 Lot 5113

24,311,668*

Land 2

  PN 42440 Lot 28268

18,438,767.91

*  cost apportioned based on land area;

   Land 1 is Part of a leasehold parcel measuring in total approximately 302,000 square meters in area which original cost of investment was RM58,513,104.00.

 

8.  UTILISATION OF PROCEEDS

The Disposal Consideration is expected to be utilised by the Group in the following manner:

           

Particular of utilisation

Amount to be utilised (RM million)

Timeframe for utilisation of proceeds

Working capital for the Group

31.3

within 24 months

Corporate Tax

12.5

within 18 months

Estimated incidental expenses related to the Disposal

5.4

within 18 months

Development expenses for on-going and future projects

59.6

within 24 months

Total

108.8

-

 

The Group is expected to record a net gain of approximately RM39.518 million from the disposal after deducting disposal expenses, taxes and related costs.

 

9.  RATIONALE AND BENEFITS OF THE TRASACTION

The Disposal is part of M K Land Group’s streamlining exercise to improve the assets utilisation and overall financial position of the Group. The Board is of the opinion that the Disposal will improve the Group’s overall financial and liquidity.

 

10.  FINANCIAL EFFECTS OF THE DISPOSAL

 

10.1  Issued and paid-up share capital

The Disposal will not have any effect on the issued and paid-up share capital of the Company.

 

10.2  Net Assets

The Disposal will not have any material effect on the Net Assets of the Group for the financial year ending 30 June 2021. However, upon completion of the Disposal, the Net Asset of the Group will increase by RM39.518 million or 3.28 sen per share.

 

10.3  Earnings

The Disposal will not have any material effect on the earnings of the Group for the financial year ending 30 June 2021. However, upon completion of the Disposal, the Group is expected to record a net gain of RM39.518 million or 3.28 sen per share.

 

10.4  Gearing

The Disposal will not have any material effect on the Gearing Ratio of the Group for the financial year ending 30 June 2021.

 

10.5  Substantial Shareholders’ Shareholdings

The Disposal will not have any effect on the substantial shareholders’ shareholdings in M K Land.

 

11.  DIRECTORS’ STATEMENT

The Board, having considered all aspects of the Disposal, including but not limited to the basis of arriving at the Disposal Consideration, rationale and the financial effects of the Disposal, is of the opinion that the Disposal is in the best interest of M K Land and is not detrimental to the interests of the minority shareholders of the Group.

 

12.  INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED

None of the Directors and/or major shareholders of M K Land, including persons connected with them have any interest, direct or indirect in the Disposal.

 

13.  RISK FACTORS

Except for the general risks such as non-completion of the SPA, the Board is not aware of any anticipated risk arising from the Disposal.

 

The Board will use its best endeavours to ensure the completion of the Disposal and will take all reasonable steps to ensure that the conditions precedents of the SPA are fulfilled in a timely manner, to avoid delays or termination and to facilitate the completion of the Disposal.

 

Completion of the Disposal is subject to the approval from the Relevant Authority and full settlement of net proceeds of the Disposal Consideration by the Purchaser. However, there is no assurance on the approval from the Relevant Authority and that the Purchaser will be able to settle the balance Disposal Consideration on the completion date of the SPA.

 

14.  APPROVALS REQUIRED

The Disposal does not require the approval of the shareholders of M K Land as it falls below the percentage ratio of 25%. However, the Disposal is subject to approval from the Relevant Authority and the estimated timeframe for submission of all applications required to the Relevant Authority to obtain the letter of consent to transfer the Land in favour of the Purchaser is stated in paragraph 5.1.2 of this announcement.

 

15.  PERCENTAGE RATIO

The highest percentage ratio applicable to the Disposal pursuant to paragraph 10.02(g) of the Listing Requirements of Bursa is 9.09% based on the Disposal Consideration which is the subject matter of the transaction, as compared with the net assets of M K Land.

 

16.  EXPECTED TIMEFRAME FOR COMPLETION OF THE DISPOSAL

Apart from unforeseen circumstances, the Disposal is expected to be completed within twelve (12) months from the date of the SPA.

 

17.  DOCUMENTS AVAILABLE FOR INSPECTION

The SPA in relation to the Disposal will be made available for inspection at M K Land’s Registered Office at No. 19, Jalan PJU 8/5H, Perdana Business Centre, Bandar Damansara Perdana, 47820 Petaling Jaya, Selangor Darul Ehsan during normal office hour from Monday to Friday (except for public holidays) for a period of three (3) months from the date of this announcement.

 

This announcement is dated 26 February 2021.






Announcement Info

Company Name MK LAND HOLDINGS BERHAD
Stock Name MKLAND
Date Announced 26 Feb 2021
Category General Announcement for PLC
Reference Number GA1-25022021-00121




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