Thursday 28 Mar 2024
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KUALA LUMPUR (June 13): Practice Note 17 (PN17) company CN Asia Corp Bhd has proposed to dispose of two parcels of leasehold land together with buildings and amenities for RM36.68 million, as part of its initiative to regularise its financial condition.

In a filing to Bursa Malaysia today, the group said it will announce additional details of the regularisation plan at a later date.

CN Asia said RM11.79 million from the proposed disposals will be used to repay its outstanding borrowings and RM22.8 million for future working capital or investment. The rest of the funds will be for real property gain tax and estimated expenses for the disposals.

As at Dec 31, 2015, CN Asia's borrowings stood at RM12.27 million.

"The proposed disposals are expected to have a positive impact on the earnings of the group as the total gross proceeds raised would provide funds for additional working capital and the repayment of bank borrowings, which is expected to result in an annual interest savings of RM710,000 based on the effective interest rate of approximately 5.98% per annum," the group said.

CN Asia's wholly-owned subsidiaries, Chip Ngai Engineering Works Sdn Bhd and Douwin Sdn Bhd, are disposing of the land to LTK Properties Sdn Bhd, a wholly-owned subsidiary of LTKM Bhd.

According to the Bursa filing, Chip Ngai is selling a plot of land measuring 9,669 sq metres, together with a one-storey steel frame structure annexed to a two-storey office, one-storey steel frame structure detached factory and a five-storey office building for RM21.86 million.

Meanwhile, Douwin is selling another plot measuring 6,559 sq metres for RM14.83 million.

Concurrently, tenancy agreements have been inked between Chip Ngai and LTK Properties for the first plot and Douwin and LTK Properties for the second plot.

According to the tenancy agreements, Chip Ngai will lease the first plot from the purchaser for three years at RM22,000 per month, while Douwin will lease the second plot from LTK Properties for three years at RM8,000 per month.

Shares of CN Asia were not traded today. The counter's closing price of 20 sen on June 9 gives it a market capitalisation of RM9.08 million.

 

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