KUALA LUMPUR: Paramount Properties Sdn Bhd, a wholly-owned subsidiary of UOA Development Bhd (UOA), has proposed to dispose of an office building in Kuala Lumpur to Marak Moden Sdn Bhd for RM72.5 million.
In a filing with Bursa Malaysia yesterday, UOA said that Paramount Properties had entered into an agreement on Dec 30, 2013, to sell the 12-storey office building. Located at The Horizon in Bangsar South, the building measures approximately 111,400 square metres with an approximate age of five years.
“Due to the rapid expansion of the UOA group, the property is no longer sufficient to meet the group’s requirements. Although a new premise has yet to be identified, the disposal of the property was predicated by the receipt of a favourable offer from the purchaser.
“In the interim, the proceeds from the proposed disposal will be placed into fixed deposit accounts with financial institutions,” UOA said in the announcement.
The company said Paramount Properties will lease back the building from the Marak Moden for a consideration of RM362,700 per month for a period of three years.
A RM7.25 million deposit will be paid by Marak Moden upon execution of the sales and purchase agreement (SPA). The balance of the purchase price will be paid by the completion period, which is three months from the date of the SPA.
“The current book value of the building is RM22.9 million and the proposed disposal is expected to generate an estimated gain on disposal of approximately RM48.2 million,” the company said.
The property is a leasehold property with an expiry date of Aug 16, 2106. Barring unforeseen circumstances, the proposed disposal is expected to be completed within three months from the date of the SPA.
Marak Moden’s principal activity is the setting up swiftlet farms to cultivate edible bird’s nests.
This article first appeared in The Edge Financial Daily, January 08, 2014.