Axis REIT obtains judgement in default against ex-tenant over RM110 mil unpaid and unexpired future rental payments

• In a Bursa Malaysia filing on Friday (Oct 20), Axis REIT said the judgement was served to Yongnam Engineering Sdn Bhd (YESB) and its corporate guarantor which is listed on the Singapore Exchange, Yongnam Holdings Ltd, as both parties did not enter their appearance in the lawsuit.

KUALA LUMPUR (Oct 20): Axis Real Estate Investment Trust (Axis REIT) has obtained a judgement in default against its former tenant at Axis Steel Centre @ SiLC in Nusajaya, Johor, over a default on rental payments and unexpired future rental payments amounting to RM110 million.

In a Bursa Malaysia filing on Friday (Oct 20), Axis REIT said the judgement was served to Yongnam Engineering Sdn Bhd (YESB) and its corporate guarantor which is listed on the Singapore Exchange, Yongnam Holdings Ltd, as both parties did not enter their appearance in the lawsuit.

In December last year, Axis REIT via its trustee, RHB Trustees Bhd, commenced civil action against YESB and Yongnam over RM8.46 million in unpaid rental and other charges YESB owed as of Dec 21, 2022.

On May 8, Axis REIT terminated the lease agreement entered with YESB in November 2014 after YESB defaulted on rental payments.

Later, on Sept 5, Axis REIT filed a lawsuit against YESB and Yongnam at the High Court in Johor Bahru to recover unexpired future rental payments amounting to RM105.4 million.

Under the latest judgement, YESB and Yongnam — as defendants — are now required to pay the trustee up to RM110.12 million, with the following breakdown:

• The unpaid rent of RM3.79 million for the period of March 2023 to June 7, 2023.
• The compensation charges of RM703,966 as at June 7, along with a 1.5% interest on a daily basis from June 8 until the full and final settlement.
• An agreed liquidated damages of RM105.39 million for the remaining lease period from June 8, 2023 until Dec 29, 2029. The sum also incurs a 1.5% monthly interest until the full and final settlement.
• The legal charges and reimbursements of RM236,954.

Meanwhile, Axis REIT said its manager, Axis REIT Managers Bhd, will make the necessary announcements to Bursa as and when there are further material developments in relation to this matter.

Axis REIT units settled unchanged at RM1.81 on Friday, giving the REIT a market capitalisation of RM3.15 billion.

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