KUALA LUMPUR (Oct 28): Johor state government's investment arm Johor Corp (JCorp) is taking its property arm Damansara Holdings Bhd private by proposing a selective capital repayment (SCR) of 80 sen per share to the Damansara Holdings' board.

The SCR of 80 sen per share — a total payment of RM43.25 million — is nearly 82% higher compared to the last traded price of 44 sen per share before the company's shares were suspended from trading on Thursday (Oct 27).  At the closing share price of 44 sen, the company is valued at RM143.78 million.

The offer price represents a 60% premium over a one-year volume weighted average market price (VWAP) of 50 sen, 60% over a six-month VWAP of 50 sen, 56.86% over a three-month VWAP of 51 sen, according to the company's filing with Bursa Malaysia.

As at June 30, Damansara Holdings' net tangible assets stood at 41.6 sen per share.

The SCR is jointly proposed by JCorp's wholly owned subsidiary JLand Group Sdn Bhd, Sindora Bhd and Kulim (M) Bhd, which collectively hold 272.71 million Damansara Holdings shares or an 83.46% stake.

As at Oct 18, JLand held 228.74 million Damansara Holdings shares or a 70% stake, followed by Sindora with 30.08 million shares (9.21% stake) and Kulim with 13.88 million shares (4.25% stake).

The proposed SCR will be meant for minority shareholders collectively holding 54.07 million shares, equivalent to a 16.54% stake.

JLand said Damansara Holdings' issued share capital will shrink to 272.7 million shares, which will be held by the trio, from 326.78 million shares currently.

Addressing its plan on the company's listing status, JLand said that it does not intend to maintain Damansara Holdings' listing on the local bourse upon completion of the SCR. It will request for the company to apply to the bourse operator for the listing status' withdrawal.

JLand reasoned that the SCR provides an opportunity for JCorp to consolidate Damanasara Holdings into its group of companies and expand the capabilities and footprints of its property and facilities management business, which it noted may involve related party transactions such as removing or injecting certain assets into Damansara Holdings.

"The proposed SCR also represents an opportunity for JCorp to strengthen [Damansara Holdings'] core existing business and subsequently improve the financial performance of [Damansara Holdings]," JLand said.

It noted that Damansara Holdings posted a loss after tax of RM44.25 million for the financial year ended June 30, 2021 (FY21), compared with a profit after tax (PAT) of RM23.39 million for FY19 and a PAT of RM19.54 million for FY18.

The company has changed its financial year end to Dec 31. For the 12-month financial period ended June 30, 2022, Damansara Holdings posted a net loss of RM14.79 million on a revenue of RM169.7 million.

The proposed exercise is subject to the approval of the entitled shareholders at an extraordinary general meeting to be convened, approval of Damansara Holdings' existing financiers and creditors, as well as a court order.

Trading of the shares in Damansara Holdings was suspended on Thursday at the request of the company for the release of this announcement.