KUALA LUMPUR (Jan 9): Benalec Holdings Bhd has called off plans to sell the remaining five of seven plots of land in Pekan Klebang, Melaka, to Titanium Hallmark Sdn Bhd.
The decision stems from the failure of Titanium Hallmark to pay the balance of the total disposal consideration for the seven plots of land, despite several extensions of time granted and several reminder notices issued to its solicitors.
In a bourse filing today, Benalec said after due consideration, it has decided to terminate the sale of five out of seven parcels of land under the sale and purchase agreement (SPA).
Benalec, through its indirect wholly-owned subsidiaries Sentosacove Development Sdn Bhd, Oceanview Realty Sdn Bhd and Strategic Cove Sdn Bhd (vendors), had on Oct 30, 2017 entered into an SPA with Titanium Hallmark for the disposal of seven plots of land, measuring 216,427 sq m for RM100.17 million.
Arising from the termination, Benalec said its solicitors will study the legal actions available to be taken by the group and at the same time, will continue to market the uncompleted land to new prospective purchasers.
"The board of directors does not foresee any material risks pursuant to the termination, except for normal operational risk such as the inability to find new purchasers for the uncompleted land.
"However, management is confident of mitigating this risk, as the company has already received new offers and is in the midst of evaluating and considering the same," it added.
The disposal was intended to provide an avenue for Benalec to monetise and crystallise the value of its landbank, while at the same time, improve its cash flow.
The group was also expected to realise a net gain of RM24.7 million, representing earnings per share of 3 sen, from the disposal. The proceeds were intended to finance its ongoing reclamation projects and for working capital.
Benalec shares closed unchanged at 15 sen today, for a market capitalisation of RM123.12 million.