KUALA LUMPUR (Jan 8): Sentoria Group Bhd is selling two parcels of land measuring 747,069 square metres (sq m) collectively in Kedah for RM27.9 million, to repay bank borrowings.
In a bourse filing, the group announced that it's 75%-owned Sentoria Utara Sdn Bhd had inked a sale and purchase agreement (SPA) with Redvalley Development Sdn Bhd for the sale of the freehold parcels in Amanjaya, Kuala Muda. One plot measures 732,336 sq m, while the second measures 14,733 sq m.
Sentoria will be using RM26.7 million of the sale proceeds to repay bank borrowings, which it noted will save it RM1.6 million worth of interest per year, based on the average interest rate of its borrowings of about 6% per annum. The balance RM1.2 million will be used for working capital.
The netbook value of the properties stands at RM27.8 million as at Sept 30, 2020, after accounting for an RM19.5 million inventory write down.
“In undertaking the proposed disposal, our company has considered the significant impact from the outbreak of the Covid 19 on the Malaysian economy, which affected the operations of the Sentoria’s Leisure and Property development division. The disposal is part of monetisation of the inventories for the purpose of the company restructuring measures with the financial institution, in response to these conditions,” Sentoria added on the rationale for the disposal.
It added that the move would lower the company’s gearing level from 99% as of March 31, 2020, to 93%, once the disposal has been executed.
Sentoria had noted it had planned to undertake a mixed development on the properties in question with a gross development value (GDV) of RM504.7 million, consisting of 1,292 units of residential properties and 90 units of double-storey shops for future developments. The project is still in the planning stage and has not obtained the necessary planning permission from the local planning authority.
The sale is expected to be completed in the group’s first quarter ended June 30.
Sentoria shares finished 7.14% or a sen lower at 13 sen apiece today, giving it a market capitalisation of RM72.5 million. It saw 1.71 million shares done.