Asiamet looking to divest all its assets

This article first appeared in The Edge Malaysia Weekly, on January 22, 2018 - January 28, 2018.
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ASIAMET Education Group Bhd has placed all its properties, including its main campus in Cheras, Selangor, up for sale. This is in line with its asset-light strategy of leasing instead of owning its campuses. The assets, which include those in Perak, Sabah and Kelantan, could fetch as much as RM135 million.

It aims to relocate its main campus to Cyberjaya, Selangor, and is on the lookout for space in the township.

“The sale is part of the group’s asset-light policy,” says Tan Sri Dr R Palan, founder and chairman of Asiamet’s largest shareholder, SMRT Holdings Bhd, in confirming the sale to The Edge. The group has hired real estate agent and valuer CBRE | WTW as its exclusive marketing agent.

Palan says the group does not want to be in the property business, but if it is not able to do an outright sale or get the price that it wants, it may consider leasing out the properties.

“The objective is to use the money for working capital and for shareholder dividends,” he says. While Palan is not able to give a definite date for the declaration of dividends, he does not discount that it could be as early as the current financial year ending Dec 31, 2018.

Asiamet last declared a dividend in 2015 following the sale of three parcels of land in Petaling Jaya, Selangor, and Masai, Johor, to Brilland Property Sdn Bhd for RM79.7 million. Brilland is controlled by Siva Kumar M Jeyapalan, a former chairman of Masterskill Education Group Bhd, which was what Asiamet was previously known as.

A total of six assets have been identified for the latest sale. The Cheras campus, located in Jalan Kemahcahaya, comprises 15 contiguous four-storey terraced shop/offices and a block comprising a single-storey auditorium and 19 stratified shoplots. The properties, which have been described as suitable for academic institutions, have an indicative price of RM28 million.

The Perak property, located in Lebuh Perusahaan Keledang in Ipoh, is a prized asset. It comprises seven academic buildings and one block of two-storey classrooms suitable for vocational and technical training. The group hopes to fetch RM33 million for it.

Asiamet has two assets in Kota Kinabalu, Sabah, both located off Jalan Tuaran. The first comprises two blocks of 14-unit five-storey shop/offices. The property, available for sale on a per block basis with vacant possession, has an estimated value of RM27 million.

The other asset comprises eight adjoining four-storey terraced shop/offices that have been renovated for use as a college.

In Kota Bahru, Kelantan, Asiamet owns four-storey terraced shop/offices in Jalan Hamzah and two blocks of 23 three-storey terraced shop/offices in Jalan Kota Bahru, Section 17. The sale is by way of expression of interest (EOI), where both parties have the option to not proceed with the deal. The closing date for the EOI is Feb 7.

In 2015, Palan, via SMRT Holdings Bhd, and private equity firm Creador, through Strategic Ambience Sdn Bhd, bought a 30.75% stake in Masterskill from its major shareholder Siva Kumar.

As part of the turnaround plan  to become asset-light, Asiamet sold the Petaling Jaya and Johor properties, enabling it to become debt-free.

In August last year, Asiamet sold its Kota Bahru campus — comprising 11 units shoplots with a net lettable area of 48,836 sq ft — to Universiti Teknologi MARA (UiTM) for RM10.2 million. Its gain from the disposal was RM1.25 million, which was used as working capital.

Last year, Asiamet also signed a sale-and-leaseback deal for its asset in Kuching, Sarawak.

Under its core business of education, the group offers foundation, diploma, undergraduate and postgraduate programmes. Some of the programmes offered are therapeutic sciences, allied sciences, business, pharmacy and nursing.

In the nine months ended Sept 30, 2017, Asiamet’s net losses widened to RM19.56 million from RM13.38 million in the previous corresponding period. This was on the back of a 20% drop in revenue to RM14.11 million in 3QFY17 from a year ago.

 

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