OUE Healthcare : 5WA 0% is proposing to sell a vacant mixed commercial development plot in Kuala Lumpur for RM125 million (S$35.6 million).
The healthcare group expects to receive net cash proceeds of approximately RM120.3 million from the sale, after deducting the sales commission and the estimated professional fees and other related expenses, which will be used for working capital purposes, it said in a bourse filing on Wednesday (May 15) evening.
The buyer is a private company incorporated in Kuala Lumpur on May 13. Its primary business is in real estate activities with owned or leased properties, said the group.
The plot is a mixed commercial development land with a 99-year leasehold expiring in Apr 29, 2108. It is approximately 4,724 square metres, and is a non-core legacy asset of the company and currently not in use.
The book value of the property is RM128 million, indicated the group’s latest audited financial statements for the financial year ended Dec 31, 2023.
No net profit is attributable to the property as it is not in use and does not generate any income or revenue, said the company.
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An independent valuation report commissioned by the company priced the market value of the site at RM128 million, as at Dec 31, 2023. This was arrived at by comparing recent transactions involving other similar properties in the vicinity. The location, plot size, surrounding developments, facilities and amenities were taken into consideration in the valuation.
The proposed disposal is part of the company’s “ongoing strategic initiatives to enhance its capital structure to support its business transformation”. It added that the deal will allow the group can achieve greater capital efficiency and flexibility, as it enables the company to unlock the property’s value and improve liquidity.
Shares of OUE Healthcare closed flat at S$0.026 on Wednesday, before the announcement.
