EcoFirst to have RM9.2m net gain despite selling eight retail units at lower than market price in related party transaction

• In a filing with Bursa Malaysia on Wednesday, the property developer said the total gain from the disposal of the 15 units is higher than the total original investment cost by approximately RM9.20 million.

KUALA LUMPUR (Oct 25): EcoFirst Consolidated Bhd has clarified that the group still has a net gain despite disposing of eight out of 15 retail units at lower than market price in a recent related party transaction.

In a filing with Bursa Malaysia on Wednesday, the property developer said the total gain from the disposal of the 15 units is higher than the total original investment cost by approximately RM9.20 million.

“The disposal price for the proposed disposal is appraised in a valuation report dated May 24, 2023 by the valuer, CCO & Associates (KL) Sdn Bhd,” it shared.

Following the disposal of the retail units, the group told Bursa that it had forgone the total annual gross rental income amounting to RM567,864, and net profit of RM362,703.

Earlier on Oct 20, EcoFirst announced that it was selling 15 retail units from its completed Liberty Arc @ Ampang Ukay mixed development project to major shareholder Tan You Tiong for RM23.82 million.

Tan owns a 2.92% direct stake and has 11.1% indirect shareholdings in EcoFirst through his wife and Aspirewell Sdn Bhd, hence the divestment is deemed a related party transaction.

Of the RM23.82 million proceeds, EcoFirst plans to allocate RM21.93 million for general working capital, RM50,000 for estimated expenses arising from this disposal, and RM1.84 million for the estimated real property gains tax.

Shares in EcoFirst closed unchanged at 36 sen on Wednesday, valuing the company at RM435 million.

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