Friday 19 Apr 2024
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KUALA LUMPUR (Oct 8): Bonia Corp Bhd has scrapped plans to sell its wholly-owned subsidiary Maha Asia Capital Sdn Bhd to its founder, CEO and group executive director Chiang Sang Sem, citing certain conditions precedent in the share sale agreement (SSA) have not been fulfilled as a reason.

Under the SSA, Chiang was to pay Bonia RM2.49 million in cash, as well as pay off Maha Asia's inter-company debt amounting to RM12.5 million to Bonia on the completion date.

Maha Asia is principally a property investment company, where its principal asset is a freehold land measuring 1,403.74 sq m, together with a single-storey bungalow in Jalan Delima here valued at RM24 million as at April 18, 2018. It is currently used as a car park.

Bonia had on May 8, 2018 signed an SSA with Chiang for the proposed disposal, which was deemed a related party transaction in view that Chiang owned 46.81% of Bonia.

At the time, the market value price of the Maha Asia Property was RM26 million, which was above its market value of RM24 million. The net book value of Maha Asia was RM21 million as at June 30, 2017, while the original investment cost was RM19.9 million.

Bonia said the proposed disposal was to enable it to divest Maha Asia Property at a premium to the market value and realise a net gain on disposal of RM4.82 million. At the same time, Bonia was also to receive an estimated RM15 million cash inflow, which would have enabled the group to pare down its bank borrowing and reduce its gearing. Its gearing level would have lowered to 0.3 times from 0.33 times, while total borrowings would have decreased to RM129.18 million from RM142.83 million. 

In a bourse filing today, Bonia said both parties have mutually agreed to terminate the SSA.

"The deposit of RM249,099, being the sum equivalent to 10% of the purchase price paid by the purchaser to the vendor, will be refunded," it added.

Bonia shares closed unchanged at 23.5 sen today, bringing a market capitalisation of RM185.51 million. It saw some 195,300 shares traded.

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