IEV Holdings to sell corporate headquarters in cost-cutting drive, after Indonesian oilfield exit

SINGAPORE - IEV Holdings is selling off its corporate headquarters in Malaysia, in a "cost rationalisation exercise", the Catalist-listed offshore engineering and gas company said on Wednesday night (Jan 10).

Its office unit in Petaling Jaya will go for a cash consideration of RM9.2 million (S$3.06 million), excluding tax, to Malaysian property and contruction company Vizione Holdings, in a sale and purchase agreement inked on Wednesday.

Most of the proceeds will go towards fully settling a related property bank loan - to the tune of RM6.69 million - as well as towards working capital.

IEV said in a filing to the Singapore Exchange that it plans to move its headquarters to a smaller, leased office in the area, as the property being sold has more office space than the group needs.

The office was sold for less than an independent professional valuation, amid "prevailing property market conditions".

The roughly 13,350 sq ft office unit, which has 87 years and six months left on its 99-year lease, was valued at RM9.35 million in mid-November 2017.

The property is slated to change hands by May 1. If the transaction has not gone through by then, Vizione is to pay a monthly rent of RM30,000 from that point until the deal is sealed.

The property sale announcement comes hot on the heels of news on Wednesday that Pertamina has terminated an oilfield exploration agreement in Pabuaran, in West Java, with IEV's Indonesian unit.

IEV said it would have to fully impair all assets related to the oilfield exploration area, which is expected to have a material negative impact on its financial results for the full year to Dec 31, 2017.

With the termination, IEV also said it will exit from the exploration and production sector and focus on the offshore engineering sector.

The company most recently reported a third-year net loss of nearly RM2.11 million for the three months to Sept 30, 2017, or more than six times the loss of RM338,000 in the same period a year ago.