Olympia Industries restructuring completed – after nearly 14 years

KUALA LUMPUR: Shareholders' approval of 15 condominium units from City Properties Sdn Bhd (CPSD) as settlement of RM55.3 million owing to Olympia Industries Bhd (OIB) marks the end of a restructuring scheme which has lasted almost 14 years.
OIB has a trading licence to operate gaming outlets in Sabah, as well as being in the property and financial services sector.
"The deal will close the long chapter of restructuring plan via this set-off exercise," a shareholder told Sunbiz quoting the board of directors, after the company's EGM here yesterday.
According to an announcement with Bursa Malaysia, 99.998% voted for the resolution by way of poll, only 0.002% voted against it.
Present at the EGM were chairman Tunku Naquiyuddin Ibni Almarhum Tuanku Jaafar and managing director Tan Sri Yap Yong Seong. Both declined to speak to reporters.
OIB first submitted group restructuring scheme involving a few corporate exercise which include the offset deal in August 2000. Its share price climbed above RM8 prior to the restructuring, but fell sharply after it, becoming a penny stock in recent years.The stock closed unchanged at 13 sen yesterday.
So far CPSD has settled a total of RM69.7 million or 55.8% of the settlement sum in cash, while the outstanding to be settled via the properties valued at RM55.3 million, represents the remainder 44.2%.
The resolution is deemed as a related party transaction as two of the OIB's directors, namely Yap Yong Seong and Datuk Yap Wee Keat are also directors of CPSD.
According to a shareholder, OIB opined that the settlement through property units is the best option as CPSD was unable to repay the borrowings in cash.
"On top of that, it enables the expansion of the existing property investment portfolio, which fits its core business activities."
The shareholder said, however, a representative from the Minority Shareholder Watchdog Group (MSWG) was concerned on the impact of a softening of the high-end residential market on the condominium units.
"According to the board, Taman U-Thant is located in a prime land in KL in which there are a lot of foreign embassies and high commissions, so they're (the company) targeting on this group while expecting capital appreciation," the shareholder said, adding that the company prefers to rent it first before selling to avoid having to pay real property gain tax, which is charged for properties sold within five years of purchase/transfer.
According to the circular, the property settlement price is at a discount of 20.86% from the developer's selling price.
It recorded a six-month net loss of RM1.05 million for the financial year ending June 30, 2014, narrowing significantly from a net loss of RM53.87 million in the corresponding period a year ago.