In a filing to Bursa Malaysia on Thursday, Dec 9, the property developer said it had on the same day entered into a sale and purchase of shares agreement with Shapadu Resources Sdn Bhd (formerly known as Shapadu Global Sdn Bhd) to dispose of Lim Thiam Leong Realty for RM50 million.
Upon the completion of the disposal of the 17 million ordinary shares of RM1, or 100% equity interest in the realty, it will cease to be a subsidiary of Bolton.
Bolton said the disposal is in line with its business rationalisation, which includes disposing of its non-core assets and investments that do not yield reasonable returns and re-focusing on property development.
"In addition, the proposed disposal would raise cash amounting to RM50 million, which will be used to meet the working capital requirements and/or to repay borrowings of the Bolton Group. This would reduce the Group's current borrowings," it added.
The proposed disposal would result in a gain on disposal for Bolton Group of RM3.16 million, it noted, adding that the proceeds from the disposal would be utilised to repay bank borrowings and/or as working capital.
Erected on a piece of freehold land, Campbell Complex is a 20-storey commercial building located on Jalan Dang Wangi, Kuala Lumpur. It consists of a total of 197 parcels, 88 parcels of which are owned by Lim Thiam Leong Realty, with the remaining parcels sold to individual owners.
The building has a total net lettable area of approximately 255,160 square feet and presently enjoys an occupancy rate of 70%.
The realty acquired the land in year 1971 for RM6 million, and the construction of Campbell Complex was completed in 1973 at a cost of RM15.33 million. The property is about 37 years old, and currently has rented out 179,783 sq ft, which generated revenue and pre-tax profit of RM6.25 million and RM1.78 million respectively for the financial year ended March 31, 2010.
Based on Lim Thiam Leong Realty's audited financial statements as at March 31, 2010, the net book value of the land and the property was RM46.63 million.
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