YLI to raise RM28m from disposal of two Penang factory properties

PETALING JAYA (July 28): YLI Holdings Bhd is disposing of two industrial properties in Seberang Perai Tengah, Penang for a combined RM28 million in cash, as the manufacturer seeks to unlock capital for working capital requirements and future business ventures.

It said in a Bursa Malaysia filing on Monday (July 27) that the disposals involve a single-storey detached factory owned by wholly owned subsidiary Yew Lean Foundry & Co Sdn Bhd and another owned by wholly-owned sub-subsidiary Zenith Eastern (M) Sdn Bhd, both of which were sold to FR Development Asia Sdn Bhd under separate sale and purchase agreements signed on July 27.

Each property was sold for RM14 million.

The larger of the two comprises a factory on 14,346.5 sq m of leasehold industrial land under HS(D) 37820 (PT 434). It is currently used for storage and was independently valued at RM11 million as at March 27. 

YLI said the disposal is expected to result in no net gain or loss after taking into account disposal expenses and real property gains tax.

The second property comprises a factory on 13,171.6 sq m of leasehold industrial land under HS(D) 37829 (PT 445), also currently used for storage. It was valued at RM11.5 million as at March 27. Despite being sold above its valuation, the disposal is expected to result in a pro forma net loss of about RM390,000, after accounting for disposal-related expenses, an estimated Penang Development Corporation (PDC) charge and real property gains tax.

Both disposal prices were negotiated on a willing buyer-willing seller basis, after taking into consideration independent valuations conducted by Raine & Horne International Zaki + Partners Sdn Bhd using the comparison approach.

YLI said the proceeds would provide additional cash flow for the group's existing operations, working capital and new business ventures. There is no fixed timeframe for utilisation as the funds will be deployed on an ongoing basis.

The purchaser, FR Development Asia Sdn Bhd, is principally involved in the manufacture of motor vehicle parts and accessories, the export and import of petroleum products, and the wholesale and retail of motorcycle parts and accessories. The company is wholly owned by Lim Fang Ying.

The disposals are not subject to shareholders' approval but remain conditional upon the necessary regulatory consents, including approval from PDC and the state authority. The Zenith Eastern disposal also requires consent from Tenaga Nasional Bhd for the transfer. Both transactions are expected to be completed in the fourth quarter of 2026.

The highest percentage ratio for each disposal under Bursa Malaysia's Main Market Listing Requirements is 9.83%, and YLI said none of its directors, major shareholders or persons connected to them has any interest in the transactions.

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