KUALA LUMPUR (Sept 2): Puncak Niaga Holdings Bhd (KL:PUNCAK) is disposing of its 100% indirect stake in Zuriat Watan Sdn Bhd (ZWSB), which owns the parcels of land affected by the East Coast Rail Link (ECRL) project, for RM83.62 million.

The deal values the lots at RM10 per sq ft that will result in Puncak Niaga recording a proforma loss on disposal of RM82.84 million, taking into account ZWSB’s negative net assets of RM36.25 million and debt of RM124.94 million to be written off, the filing showed.

ZWSB owns 882 leasehold building lots measuring 8.36 million sq ft, which is affected by the ECRL project that cuts through the southern part of the subdivided lots.

“The proposed disposals are part of Puncak’s strategy to monetise its non-core assets, to ease the cash flow of the group,” it said.

The disposal took into consideration the severance damages link to the project, as well as the cost to reassess and redesign the approved development plan on the unaffected portion of the subdivided lots, Puncak Niaga pointed out.

In total, ZWSB has disposed of 24 plots of land to the Malaysian government for the ECRL project, to which it has received RM24.31 million. It has yet to receive the remaining RM8.1 million, which is currently on hold due to disagreement to the compensation sum.

ZWSB is a unit of TRIplc Bhd, which Puncak Niaga acquired in 2018 for RM210 million.

Of the entire 100% equity holdings in ZWSB, 4.5% was sold to Jinze Sdn Bhd for RM3.58 million, while the other 95.5% was sold to Leeway Holdings Sdn Bhd, DB Enneadrakon Group (M) Sdn Bhd and Sheng Dar Holdings Sdn Bhd back on Aug 27.

From the proceeds, Puncak Niaga will utilise RM20 million to pay its debt, another RM58.62 million for working capital, and the remaining RM5 million for estimated expenses relating to the disposal.

As at end-June, Puncak Niaga had total borrowings of RM1.15 billion, against cash of RM198.61 million for a net debt position of RM952.1 million. Full-year finance cost amounted to RM72 million in 2023, its filing showed.

With total equity of RM1.3 billion, the group’s net gearing stood at 0.73 times.

In the six months ended June (1HFY2024), Puncak Niaga's net loss widened to RM22.59 million or 5.05 sen per share, from RM14.14 million net loss or 3.16 sen per share in 1HFY2023.

This as revenue fell 22.84% to RM97.64 million, from RM126.54 million, on a weaker construction segment that went into the red, as well as weaker concession segment whose profit shrunk in the period. Through TRIplc, Puncak Niaga undertakes facility management concessions with UiTM.

Puncak Niaga shares settled half a sen or 1.8% higher at 29 sen, valuing the group at RM132.63 million.