KUALA LUMPUR (July 8): Practice Note 17 (PN17) company Nationwide Express Holdings Bhd is disposing of a property in Shah Alam to real estate company Rubicon Lexington Sdn Bhd at below market price.

The selling price of RM19.4 million is a discount to the market value of RM22 million, the group’s filing said.

The selling price is also lower than property’s net book value of RM26.8 million based on the company’s latest audited consolidated financial statements for the financial year ended March 31, 2020 (FY20).

Hence, the courier service provider said the disposal of the property would result in a net loss of RM3.8 million, after deducting estimated taxation and expenses of the proposed disposal.

According to Nationwide Express, the property has been advertised for sale for the past six months and the consideration given by Rubicon Lexington was the highest consideration received by its wholly-owned subsidiary, Nationwide Express Courier Services Bhd (NECSB) from a close tender undertaken for its disposal.

The property comprises a parcel of leasehold 99-year industrial land with a three-storey office building, a one-storey detached warehouse building annexed with two units of two-storey office buildings, as well as ancillary buildings comprise a one-storey building, two guard houses, a gen-set room, a substation and a refuse chamber.

The disposal is expected to be completed by the fourth quarter this year.

Rahim & Co International Sdn Bhd was appointed as the exclusive marketing agent for the property, while the market valuation on the property was carried out by KPH Property Consultants Sdn Bhd.

Nonetheless, Nationwide Express said the disposal would enable the group to monetise its assets and unlock capital resources from being tied up in long-term assets to strengthen its financial position.

Additionally, it will also allow the group to streamline its operations by centralising the headquarters and the logistics centre at the same location and hence optimise the utilisation of assets owned by the group.

Meanwhile, the proceeds from the disposal would be used as working capital and is expected to have a positive impact on the group’s earnings.

To recap, Nationwide Express was classified as a PN17 company on Feb 24 this year, after its shareholders' equity fell to less than 50% of its paid-up share capital.

For the financial year ended March 31, 2020 (FY20), the group’s net loss widened to RM35.25 million from a net loss of RM31.43 million a year ago, while revenue fell 23.72% to RM66 million from RM86.52 million due to lower contribution from its courier business.

Nationwide Express shares price closed unchanged at nine sen, valuing it at RM11.09 million. The stock saw some 4,300 shares done.