PETALING JAYA (Aug 14): Mah Sing Group Sdn Bhd announced today that its wholly-owned subsidiary, Grand Prestige has rescinded its acquisition of a piece of prime, freehold land in Seremban for RM359.96 million. This is due to a breach in its sales and purchases agreement (SPA).
The group said in a Bursa Malaysia announcement today that its solicitors had sent a letter to the vendors, to seek for a refund of the opposite being 10% of the purchase consideration, equivalent to approximately RM35.96 million.
According to Mah Sing, the SPA is void and/or rescinded, due to, amongst others, misrepresentation and/or the breach of terms and conditions of the SPA by the Vendors and/or events that are unlawful have occurred.
The group added that the board is of the opinion that the rescission of the proposed acquisition is in the best interest of Mah Sing and its shareholders.
“Mah Sing had raised total gross proceeds of RM629,323,152 from the rights issue with warrants, which was completed on Feb 26, 2015. Approximately RM107.2 million of the total proceeds raised from the rights issue with warrants was earmarked for part payment of the acquisition of the Seremban Land,” said Mah Sing.
The group maintained that the proposed reallocation of the proceeds is in line with its intention.
“As the development would be developed over a period of seven to eightyears, with revenue contribution estimated to commence only in 2016, the rescission of the proposed acquisition is not expected to have a material effect on the earnings of Mah Sing in the near term,” said Mah Sing. “Any medium to long-term impact would be mitigated through the development of its existing landbank and/or new lands acquired in the future,” it said.
The rescission of the proposed acquisition is not expected to have any material effect on the earnings per share and net assets per share of Mah Sing for the financial year ending Dec 31, 2015.