PETALING JAYA: Daya Materials Bhd has proposed to dispose of a parcel of leasehold land and industrial premises in Penang for RM10.33 million cash, in an effort to raise funds for working capital needs, tide over cash flow crunch in the interim, and reduce its bank borrowings.
The industrial plot comprises a double-storey office building with an annexed single-storey detached factory, a single-storey warehouse with an annexed double-storey detached office building and other ancillary buildings.
In a Bursa filing, the group said it has signed a conditional sale and purchase agreement with Wanjun Engineering Sdn Bhd for the proposed disposal.
The land was acquired by the groupâs subsidiary Daya CMT Sdn Bhd in July 1998 and construction of buildings completed at a total investment cost of about RM2.8 million.
The disposal consideration of RM10.33 million was arrived at on a willing-buyer willing-seller basis after taking into consideration the market value of the property of RM7.8 million, based on the valuation report by Savills (Malaysia) Sdn Bhd on Oct 30.
Daya Materials explained that its financial difficulties began with the downturn in the global oil and gas industry since 2014, and exacerbated by ongoing litigations with the groupâs contractors in its technical services segment, leading to further impairments of receivables, and causing the group to lapse into Practice Note 17 status on Feb 28, 2018.
It was required to submit a regularisation plan by Feb 28, 2018, but was subsequently granted an extension of time until Feb 27, 2021 to submit it.
âTo that end, the company has been in active discussions with its advisers to restructure its debts and liabilities, and negotiate with lenders and creditors on a debt restructuring scheme, which shall form part of the overall regularisation plan to regularise the financial condition of the group,â it said.
In addition, the group has been exploring options to monetise assets in order to improve its liquidity position, and since the disposal consideration also represents a premium over the market value and latest audited net book value of the property, it would enhance the earnings of the group with an estimated net gain on disposal of about RM7.3 million.
The proposed disposal is expected to be completed by the first half of next year.
