Advance Synergy Bhd (ASB) has completed the sale of management services agreements, licensing agreements, and trademarks of its wholly-owned subsidiary, Alangka-Suka Hotels & Resorts (ASHR) to Holiday Villa Group.
It told Bursa Malaysia today that the sale had been completed on December 3, 2021.
The agreements and trademarks were sold for RM7 million to Holiday Villa Hotels & Resorts Sdn Bhd (HVHR) and Holiday Villa Hotels & Resorts Limited (HVHRL).
ASHR, via its direct or indirect subsidiaries, collectively referred to as "vendors", had inked three agreements with HVHR and HVHRL on May 7, 2021.
The vendors are Antara Holiday Villas Sdn Bhd (AHV), Holiday Villas International Limited (HVIL), Holiday Villa Middle East Ltd (HVME), and Cherating Holiday Villa Bhd (CHV).
According to Bursa Malaysia, ASB first announced the proposed disposal in May, and the filing shows that it is a related party transaction.
Tan Sri Azman Shah Haron and his daughter, Nina Karina Tan Sri Azman Shah, are the owners of HVHR.
Azman is the chairman and director of ASHR and a director of HVHR and HVHRL. His wife, Puan Sri Masri Khaw Abdullah, is an ASB non-independent non-executive director. She is also the managing director, chief executive officer, ASHR director, and director of the vendors.
According to the filing, the majority shareholder of HVHRL is ASH Holdings Sdn Bhd (99.98 per cent), which Azman and Masri control.
HVHR and HVHRL acquired contracts under AHV, HVIL, and HVME and trademarks registered under AHV, CHV, and HVIL as part of the disposal. The contracts are hotel management agreements or licence agreements for 19 Holiday Villa and D-Villa hotels in Malaysia, Indonesia, Qatar, Saudi Arabia, and China, entered into with the respective hotel owners.
The purchasers will receive 49 trademarks as part of the proposal, including Amoras Relaxation Spa, D-Villa Residence, Holiday Villa, and City Villa.
ASB had said that the sale aligns with the group's plans to shift resources to explore new market opportunities while streamlining its current core businesses.
According to the May filing, ASB will record an estimated net gain of RM6.8 million from this exercise, and the proceeds will strengthen the group's cash flow position.
ASB's revenue for the nine months ended September 30, 2021, was RM74.6 million, a 13.7 per cent decrease from the corresponding period last year's figure of RM86.4 million.
In a stock exchange filing last month, it stated that the global Covid-19 outbreak and movement control order hurt the company's revenue.
Except for the information and communications technology, property development, and investment divisions, ASB said that all divisions reported lower revenue in the first nine months.
Despite lower revenue, ASB recorded a lower pre-tax loss of RM21.4 million in the first nine months of this year, compared to a pre-tax loss of RM31.5 million in the same period last year.
With the uncertainty of economic recovery, ASB said it would continue to actively pursue measures to manage its operating costs and rework future business plans to minimise any potential negative impact from the prolonged Covid-19 pandemic.