KUALA LUMPUR (July 30): AYS Ventures Bhd is disposing of a freehold land and properties in Selangor for RM10.8 million. The land sale is expected to result in a loss of approximately RM1.2 million.
The steel product manufacturer said in a bourse filing its wholly-owned subsidiary Ann Yak Siong Hardware Sdn Bhd (AYSH) had entered into a sale and purchase agreement (SPA) to dispose of a freehold land in Kapar, Klang, Selangor, measuring approximately 8,809 square meters or 2.1767 acres together with a single-storey open-sided detached warehouse and an annexed double-storey office block in Kawasan Perindustrian Bukit Raja, Shah Alam, Selangor to OCH Land Sdn Bhd (OCHL).
It said AYSH will also enter into a tenancy agreement with OCHL to rent the property upon the completion of the SPA, at a monthly rental sum of RM53,000 for one year and with an option to renew for a further term of two years immediately following the expiry of the original term.
AYS Ventures said the proposed disposal will enable AYSH to monetise its existing asset and allow it to utilise the cash for working capital of its business operations.
“It will also allow AYSH to maximise opportunities on inventory management with minimal increase in external borrowings,” it said.
The company said the operating activities of AYSH will not be disrupted as it will continue to operate at the property by means of the proposed tenancy until such time the new warehouse at K International Industrial Park is ready for use.
The company on Dec 16, 2020 announced that AYSH had acquired a piece of freehold land at K International Industrial Park, Kapar, Klang to construct a new warehouse as the group intends to consolidate its warehousing activities for operational efficiency and optimisation.
AYS Ventures said the proceeds from the proposed disposal will be used for working capital purposes of AYSH in relation to purchase of steel products.
The proposed disposal is expected to be completed in the third quarter of the financial year ending March 31, 2022.
AYS Ventures’ share price gained one sen to close at 38.5 sen, valuing the group at RM142.65 million.
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