KUALA LUMPUR (April 6): TA Enterprise Bhd’s subsidiary Winner Star Group Ltd has signed a provisional agreement with Champion Castle Ltd and Zeppelin Property Development Consultants Ltd for the disposal of two office units at Tower One Lippo Centre in Hong Kong for HK$137 million (RM67.48 million).
It said in a filing with Bursa Malaysia today that RM62.77 million of the proceeds raised will be used to repay bank borrowings, while the balance will be used to cover the estimated expenses for the exercise.
The group had acquired the property for investment in July 2001 for HK$24.55 million, which was used by TA Securities (HK) Ltd (TAHK) as premises for its stockbroking operations.
TA embarked on a restructuring exercise in 2014, which saw the divestment of TAHK and had ceased all stockbroking operations in Hong Kong, with the property sold to Winner Star and tenanted out for rental.
“Although the intention of the company, post restructuring is to continue to maintain the property for rental income and capital appreciation, but given that an attractive offer at an approximate premium of 458% to its original acquisition value was received for the purchase of the property, the company decided to unlock the value of the property.
“The estimated gain from the sale of this property is HK$110.22 million (RM54.31 million) including estimated cost, expenses, taxes and duties payable (if any). The proposed disposal also provides an avenue for the company to raise funds for its on-going business without being overly dependent on bank borrowings,” it said.
The group expects to complete the disposal by June 2018, barring unforeseen circumstances.
TA Enterprise fell 1 sen or 1.94% to 50.5 sen, giving it a market capitalisation of RM864.51 million.