Propel Global exits non-core Bangi industrial sites in RM6.75 mil deal

PETALING JAYA (July 8): Propel Global Bhd has proposed to dispose of two leasehold industrial properties in Bandar Baru Bangi, Selangor, for a total cash consideration of RM6.75 million via Propel Engineering Sdn Bhd (PESB), a wholly owned subsidiary of Propel Oilfield Services Sdn Bhd, which is 49.0%-owned by PGB. PESB entered into two separate sale and purchase agreements (SPAs) with Flint Masters Sdn Bhd and Chocofac (Malaysia) Sdn Bhd on July 7, 2026.

Asset breakdown and specifications

According to a Bursa Malaysia filing yesterday by Propel Global, PESB is disposing of:

1) Property 1 (SPA 1) – HS(M) 9660, PT 11491, Seksyen 13, Bandar Baru Bangi, Mukim Kajang, Daerah Hulu Langat, Selangor, measuring about 990 sq m, with postal address No. 9, Jalan P/8, Peringkat 2, Kawasan Perusahaan B. Baru Bangi, 43650 Bandar Baru Bangi.

2) Property 2 (SPA 2) – HS(M) 9661, PT 11492, Seksyen 13, Bandar Baru Bangi, Mukim Kajang, Daerah Hulu Langat, Selangor, also measuring about 990 sq m, with postal address No. 11, Jalan P/8, Peringkat 2, Kawasan Perusahaan B. Baru Bangi, 43650 Bandar Baru Bangi.

Both properties are 99-year leasehold land expiring on Sept 29, 2086, with industrial use and currently charged to OCBC Bank (Malaysia) Bhd. Each property has an audited net book value of RM3.4 million as at June 30, 2025.

Consideration, valuation and terms

Each property is being sold for RM3.375 million, giving a total disposal consideration of RM6.75 million. The disposal consideration was arrived at on a willing-buyer, willing-seller basis, taking into account:

i) an external valuation report dated March 17, 2026 that placed the market value of each property at RM3.4 million (prepared for financing purposes); and

ii) the present state and condition of the properties.

For each SPA, the consideration is structured into an earnest deposit, a real property gains tax (RPGT) retention sum and a balance deposit, with the balance purchase price payable upon completion. The SPAs are conditional upon obtaining State Authority consent to transfer the properties to the respective purchasers within three months from the SPA date, with an automatic extension of a further three months if consent is not obtained in the initial period.

If consent to transfer is not obtained, the SPAs provide for the refund of the RPGT retention sum and the relevant deposits in accordance with the SPA terms, together with the withdrawal of any private caveat.

Rationale and use of proceeds

PESB originally acquired the Bangi properties to accommodate its business and operational needs, before vacating the occupied properties in 2024. The announcement notes that the properties are no longer required for PESB’s operational purposes and hold limited strategic value to the PGB group.

The proposed disposal is expected to:

a) reduce ongoing costs associated with property ownership, including maintenance, repairs and property management expenses; and

b) improve the group’s operational efficiency and strengthen its cash flow position through the release of capital tied up in non-core assets.

PGB intends to utilise the RM6.75 million proceeds as follows:

c) RM3.95 million for PESB’s working capital requirements, including procurement of raw materials, spares and consumables, manpower services and general administrative expenses such as salaries, wages, rent and utilities for both building and marine Heating, Ventilation and Air-Conditioning (HVAC) services projects and construction/building projects from the technical services segment.

d) RM2.5 million to redeem a trade facility for which the properties are currently pledged as security, which the announcement states will result in interest savings to the group.

e) RM0.3 million to cover estimated disposal expenses, including legal and professional fees, tax payable and related costs.

If actual disposal expenses are higher than estimated, the shortfall will be funded from the portion allocated for working capital; if lower, any excess will be used for PESB’s general working capital requirements.

Effects and risk

The highest percentage ratio applicable to the proposed disposal under Paragraph 10.02(1)(g) of the Main Market Listing Requirements is approximately 7.5%. The proposed disposal:

f) will not have any effect on PGB’s issued share capital or substantial shareholders’ shareholdings, as it does not involve the issuance of new ordinary shares;

g) is not expected to have any significant impact on the company’s net assets or gearing for the financial year ending June 30, 2027; and

h) is not expected to have any material effect on the group’s earnings and earnings per share for the same financial year.

Completion of the proposed disposal is subject to fulfilment of the conditions precedent set out in the SPAs. The announcement notes that if these conditions are not fulfilled, the proposed disposal might be delayed or terminated, and that PGB’s management will endeavour to ensure they are met in a timely manner. Barring any unforeseen circumstances, the proposed disposal is expected to be completed by the fourth quarter of 2026.

Recycling capital from vacant assets

From a property perspective, the proposed disposal demonstrates how a listed company may recycle non-core industrial real estate after it is no longer required for operations. In this case, PESB vacated the properties in 2024 and intends to redeploy the RM6.75 million proceeds towards working capital, repayment of bank borrowings and disposal-related expenses, in line with the utilisation of proceeds disclosed in the announcement.

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