Frankly Speaking: Intriguing developments at Avillion

This article first appeared in The Edge Malaysia Weekly, on March 2, 2020 - March 08, 2020.
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On Feb 19, resort operator Avillion Bhd announced that Toh Puan Mahani Idris was no longer a substantial shareholder of the company as she had transferred 247.3 million shares or 28.8% equity interest to Maybank Trustees Bhd on July 9 last year.

The question is, why did it take more than six months for the company to make the material announcement?

Note that Mahani is the wife of former finance minister Tun Daim Zainuddin.

And on Feb 26, Avillion confirmed an earlier news report that it had received an unsolicited offer from China’s Guangxi East Hangyang Investment Group to purchase certain pieces of land owned by it in Port Dickson for RM382 million.

While Avillion said the offer was “subject to due diligence and final agreements”, it did not state which parcels of land the Chinese party was eyeing.

The day after the company announced the offer, it was one of the most actively traded stocks on Bursa Malaysia.

According to Avillion’s 2019 annual report, it had at least 10 parcels in Port Dickson — three under Avillion Hotel Port Dickson, four in Admiral Cove and three more in Si Rusa. Some of the parcels are developed while some have not been revalued for as long as 18 years.

Avillion’s land bank is valued at RM293.56 million in total, which means the Chinese party’s offer of RM382 million was at a steep premium. At its close of 16 sen last Thursday, Avillion had a market capitalisation of RM151.1 million.

The company was in the red from FY2016 to FY2019, accumulating losses of RM100.69 million as at Sept 30, 2019. It was also deep in debt. Given its weak financial state, it will be interesting to see if the offer materialises into an actual transaction.

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