SINGAPORE - Mechanical and electrical engineering company Libra Group is selling an investment property comprising 12 adjoining pieces of leasehold land in Kuala Lumpur for $8 million, according to filings on the Singapore Exchange on Thursday (April 4).
Under a conditional deal signed on April 3, Libra unit YC Travel & Tours Sdn Bhd will sell the property to an independent third party, David Lian Foo Kuan. The disposal is part of a post-acquisition covenant stemming from Libra's acquisition of the holding company of YC Travel & Tours, a deal in which Libra bought over the business but did not want the properties.
Based on the group's latest unaudited consolidated accounts for the financial year ended Dec 31, 2018, the carrying value of the investment property is about $8.5 million. No valuation was carried out on the investment property, Libra said.
The S$0.5 million deficit over the carrying value of the investment property will not be recognised as a loss by the group, however, as it will be assumed by executive chairman and chief executive Chu Sau Ben as well as shareholders Choong Hin Seong, and Tuan Haji Anuar bin Ahmad as part of the YC Travel & Tours acquisition agreement.
Net proceeds from the disposal is expected to be about S$7.7 million, after deducting expenses. These will be used to repay the investment property's indebtedness, with the balance for working capital purposes, the company said.
Among other things, the proposed disposal is subject to approval from the State Authority of Malaysia within six months from the agreement, and approval from any financial institution in granting the loan facilities to the purchaser.
The disposal is not expected to impact the group's unaudited financial statements for the financial year ended Dec 31, 2018, the company said.
Shares in Libra Group last traded flat at 8.9 cents apiece on March 28.