CEO Morning Brief

YNH Extends Deadline for RM170 Mil Land Sale to Sunway by a Year After Caveat Found

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Publish date: Tue, 14 May 2024, 10:12 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (May 14): YNH Property Bhd’s (KL: YNHPROP) proposed sale of a 5.098-acre freehold land in Desa Sri Hartamas to Sunway Bhd (KL:SUNWAY) for RM170 million has been extended for a fifth time, stretching the deadline by another year to May 12, 2025, as more conditions are being added to the deal following the discovery of a registered caveat lodged over the property.

In a filing with Bursa Malaysia on Monday, YNH said a land search conducted on Feb 26, 2024 revealed the caveat lodged over the property on Sept 25, 2023 and an endorsement dated Sept 29, 2023, pending registration, accompanied by remarks indicating “Hakmilik Kekal Ambil Balik Sebahagian Tanah” for an acquisition.

As such, the parties involved in the land sale, consisting of YNH’s wholly-owned Kar Sin Bhd as vendor and Sunway Bhd’s unit Sunway Living Space Sdn Bhd as the purchaser, inked a supplementary sales and purchase agreement (Supplemental SPA2) to extend the conditional period for one year, following the expiration of the last extended due date on May 12, 2024.

This is for the vendor to, among others, obtain a new development order (DO), and to have the caveat, also known as registrar's caveat, removed or cancelled. A registrar’s caveat is normally put in place to protect the state’s interest or to prevent erroneous transactions or fraud.

YNH shall bear the cost and expenses for doing so, and shall provide documentary proof to Sunway's solicitors.

It was also agreed that Kar Sin will promptly apply for and ensure the issuance of a new title document to the property that clearly indicates that Kar Sin had acquired the land prior to selling it to Sunway Living Spaces.

It was reported previously that while Kar Sin is the named vendor, the land’s registered proprietor is Imbuhan Sempurna Sdn Bhd, while its first beneficial owner is Great Wall Park Sdn Bhd (GWP). Imbuhan Sempurna and GWP are owned by Yu Teong Wei and Lau Sheng Ming.

While the latest agreement maintained that RM50 million will be added to the price tag if YNH manages to obtain the new DO for a project with a plot ratio of seven, it will still be able to get RM20 million extra if it only obtains the new DO with a minimum plot ratio of six.

Meanwhile, the purchaser's obligation to settle the balance purchase price shall be suspended until the fulfilment of the conditions outlined in the Supplemental SPA2.

In January this year, YNH belatedly disclosed that Kar Sin had in April 2022 inked a sale and purchase agreement with GWP to acquire the land, followed by a supplemental agreement.

The supplemental agreement saw both parties agreeing to terminate a 2016 turnkey construction agreement for a mixed residential and commercial development on the land, for which Kar Sin paid a RM239.5 million security deposit.

With the cancellation of the turnkey agreement, RM150 million of the deposit paid would be recognised as Kar Sin's payment to acquire the land, while GWP would refund the remaining RM89.5 million back to Kar Sin.

YNH shares ended half a sen or 1.16% higher at 45 sen, giving the group a market capitalisation of RM235.40 million.

Source: TheEdge - 14 May 2024

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