KUALA LUMPUR (Aug 10): TA Global Bhd stands to gain A$102 million (RM346.46 million) by selling off the remaining undeveloped land in its Little Bay Cove project, a 33.6-acre (13.6ha) freehold residential development in New South Wales, Australia.

Its wholly-owned unit TA Little Bay Pty Ltd (TALBP) inked a put and call option deed yesterday with Karimbla Properties (No 50) Pty Ltd to sell the property for A$245 million or approximately RM832.2 million, the company announced in a filing with Bursa Malaysia.

The proposed sale involves eight development lots and 26 house lots with a total land area of 24.26 acres. Its original cost of investment for the land from October 2010 up to August 2014 was A$112.95 million (equivalent to RM383.66 million).

Under the option deed, TALBP will grant Karimbla a call option to buy the property, and the purchaser will grant TALBP a put option to require Karimbla to buy the said property, based on the terms and conditions set out in the deed.

TALBP has four months from the date of the option deed to obtain the required approval from its shareholders for the proposed disposal, after which Karimbla will be entitled to exercise the call option.

To secure the call option, Karimbla will pay TALBP a call option fee of A$24.5 million (equivalent to RM83.21 million). The sum will be returned to Karimbla if TALBP breaches the agreement, but will be kept by TALBP if the breach is by Karimbla.

In return, Karimbla will grant TALBP the put option for A$1. The put option is an irrevocable offer by Karimbla to buy the property under the conditions agreed on, said TA Global.

In March, the company’s chief executive officer Tiah Joo Kim told The Edge Malaysia weekly that the company wanted to sell the development to de-gear. The group’s financial gearing as at Dec 31, 2016 was 0.85 times.

From the expected sale proceeds, the bulk or A$120 million will be used to repay bank borrowings, while A$100 million will be used to fund the purchase of property or assets for business expansion. Of the remainder, A$20 million will be used for working capital, while the rest will be used to defray expenses related to the planned disposal.

TA Global’s share price closed unchanged at 34 sen yesterday, with a market capitalisation of RM1.8 billion.

This article first appeared in The Edge Financial Daily, on Aug 10, 2017.

For more stories, download TheEdgeProperty.com pullout here for free.

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