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KUALA LUMPUR (Dec 16): Berjaya Land Bhd (BLand) is cashing out its Berjaya (China) Great Mall Recreation Centre in Hebei, China — which is still under construction — for RMB2.08 billion (RM1.39 billion), the bulk of which has been earmarked to repay borrowings, creditors and contractors.
The group is expected to record a loss of about RMB51.28 million (RM34.25 million), pursuant to the proposed disposal, according to its filing with Bursa Malaysia today.
Berjaya (China) Great Mall Co Ltd (GMOC), a 51%-owned unit of Berjaya Leisure (Cayman) Ltd (BL-Cayman), which is in turn a wholly-owned subsidiary of BLand, entered into a Construction Project Transfer Agreement (contract) with Beijing SkyOcean today to effect the sale.
The remainder 49% stake in GMOC is owned by Berjaya Times Square (Cayman) Ltd, a company owned by Tan Sri Vincent Tan Chee Yioun and his son, Ravin Tan Yeong Sheik.
Beijing SkyOcean is wholly-owned by SkyOcean Holdings Group Ltd, which is owned by Zhou Zheng (80%) and his sister, Zhou Jin (20%).
The Great Mall Project, which spans 306,260 sq m of land area with about 1.21 million sq m of gross floor area, comprises the development and construction of a hotel, serviced apartments, restaurants, recreational centres and commercial shops. It is situated in the Yanjiao Economic Development Area, in Sanhe, Langfang City, Hebei.
BLand said the consideration for the proposed disposal was arrived at on a "willing-buyer willing-seller" basis after taking into consideration the market valuation of the Great Mall Project of RMB2.018 billion, as appraised by Messrs Cushman & Wakefield on Feb 28, 2015, and the carrying amount of the Great Mall Project as at Oct 31, 2015 of RMB1.75 billion.
"The cash consideration of RMB2.08 billion represents a premium of 3.07% over the market valuation and a premium of 18.86% over the said carrying amount," BLand said.
The proceeds will be received by GMOC over a maximum of 24 months from the signing of the contract. GMOC is principally involved in the Great Mall Project. It will cease operations upon the completion of the proposed disposal.
Of the proceeds, RMB1.11 billion (RM743.05 million) will be used to repay borrowings, creditors, contractors, and to defray taxes on sale of the Great Mall Project and incidental expenses within 12 months from the respective dates of receipt of the cash portion, it added.
The balance of RMB967.48 million (RM646.18 million) is proposed to be distributed to the shareholders of GMOC, which BL-Cayman, upon receipt, will use for working capital of the BLand Group.
BLand said the disposal provides an opportunity for the BLand Group to cash out its Great Mall Project.
Barring any unforeseen circumstances, the proposed disposal is expected to be completed by the end of 2017.
BLand shares closed unchanged at 72 sen today for a market capitalisation of RM3.59 billion. -- theedgemarkets.com
