KUALA LUMPUR: Rapid Synergy Bhd does not anticipate that the proposed sale of land and a building in Perak for RM25 million will cause it to turn into a cash company or a PN17 issuer in accordance with the Main Market Listing Requirement of Bursa Malaysia.
According to a stock exchange filing, the company is selling 11,345 square metres of leasehold land and a commercial building in Ipoh to unlock and realise the value of the property and to raise money for various uses.
For the planned disposal, its subsidiary, Fresh Melody Sdn Bhd (FMSB), has a conditional sale and purchase agreement in place with Intra Megamas Sdn Bhd.
According to Rapid Synergy, the company would be able to use the cash proceeds from the sale of the property to pay off bank loans totaling RM10 million, expand the business, and meet working capital needs of RM13.75 million.
It said that the RM25 million sale price was determined on a "willing-buyer" and "willing-seller" basis, subject to a lease, and free of any encumbrances.
"The Board is of the view that the sale consideration is justifiable after taking into account the NBV of the property based on the audited consolidated financial statements of FMSB as of December 31, 2021," it said.
Rapid Synergy invested RM9.89 million on the land in November 2007 and RM18.41 million in the building in November 2011, according to the filing.
The lease on the commercial building, which is 10 years old, expires on August 8, 2004. Tenaga Nasional Bhd has leased a section of the site.
Subject to the transfer consent being finalised, the company anticipates the sale to close by the second quarter of 2025.
Rapid Synergy's revenue for the first quarter ended March 31, 2023 (Q12023) decreased to RM5.88 million from RM8.27 million recorded in the immediately preceding quarter.
The company declared a pre-tax profit of RM300,000 for the quarter, down from the RM3.22 million pre-tax profit reported in the immediately before quarter.