KUALA LUMPUR: YNH Property Bhd yesterday announced that it has revoked an earlier sale and purchase agreement (SPA) for its 2.6 hectare land in Segambut and granted development rights for it to Chin Hin Property (Segambut) Sdn Bhd, to quickly generate cash.
In two separate filings with Bursa Malaysia Securities Bhd yesterday, YNH said it revoked an SPA entered with Frazel Group Sdn Bhd in Sep 2023, on April 24, 2024 and entered into a development agreement with New York Empire Sdn Bhd (NYESB", the proprietor of the land and Chin Hin Property, on the same date.
Chin Hin Property will be the developer of the land. f
The deal comes with a RM52 million guaranteed beneficiary owner's entitlement and additional beneficiary owner's entitlement, that allows the company to quickly generate cash or capital from the land without engaging in the development process.
YNH said RM27.5 million of the monies received will be used to redeem the land, which is currently charged to RHB Bank Bhd, RM24 million as repayment of deposit for the revoked SPA with Frazel and RM500,000 for repayment of loans.
YNH also said that the deal will serve as a risk mitigation strategy for the company, as developing land can be a complex and capital-intensive process with various risks such as construction delays, cost overruns, and market uncertainties. "By granting the development Rights, the company transfers some of these risks by reducing its own exposure," YNH said.
The land in Segambut will be developed into a RM685.1 million gross development value serviced apartments.
YNH, which triggered a technical default on its sukuk wakalah programme, last Friday said it had remedied a technical default on its bonds, after making the requisite payments.
The company triggered a technical default according to MARC Ratings after it failed to deposit the second monthly payment of RM6.1 million due on March 28, 2024, as part of the build-up in the reserve account.
YNH's share price was down one per cent to 47.5 sen a share as at 9.31am.