Ivory Properties Group Bhd (Ivory) is selling its plot of freehold land measuring approximately 1.218 acres within an existing project known as Penang Times Square in George Towm to Chin Hin Property (Penang) Sdn Bhd for RM40 million.
In a Bursa filing today (Jan 10), the group said its unit Ivory Gleneary Sdn Bhd had entered into sales and purchase agreement (SPA) today with Chin Hin Property, which is a wholly-owned subsidiary of BKG Development Sdn Bhd (BKGD).
Further to the announcement made by Ivory on 8 December 2023 in relation to the binding term sheet for the proposed disposal, the group said the agreement was to sell and assign to the purchaser, all vendor’s (seller) rights, title, and interests in the land on an ‘as-is-where-is’ basis.
Ivory said the proposed disposal forms part of the group’s regularisation plan and was to provide future dividend income from share of net profit of the development without actual cash flow as the initial cost of investment.
“(Additionally), the turnkey builder work is anticipated to yield construction revenue amounting to approximately RM150 million to the subsidiary of Ivory,” it said.
The land is a piece of 4.922 hectares (approximately 12.1625 acres) master land, and held under a master title, subject to conditions and restrictions stated, which allow it to be used for residential and business purposes only.
“There is an existing building on master land known as Birch House, in which the vendor (Ivory’s unit) has developed a portion of the master land as part of a development scheme known as Penang Times Square.
“Currently, the vendor has completed construction of Phase 1 (Birch The Plaza) and Phase 2 (Birch Regency), including the commercial center and office tower associated with these two phases of the project.
“(Meanwhile, the construction of Phase 3 (The Wave) along with the commercial podium related to this phase of the project is nearing completion, leaving certain parts of the master land undeveloped including the land (currently identified as Penang Times Square, Phase 4), and another plot of land which is designated as Phase 5 of the project,” it said.
The group said there are a few agreements and conditions to go along with the disposal, including with regards to development, turnkey builder agreement, and exclusive rights.
On the exclusive rights agreement, the group said: “In addition to the Turnkey Builder Agreement, with the execution of the SPA, the purchaser shall itself and shall secure its holding company, BKGD to enter into an Exclusive Right Agreement with Ivory Utilities Sdn Bhd (IUSB), another subsidiary of Ivory.
“The agreement entails the purchaser and BKGD shall grant to IUSB an irrevocable exclusive right to subscribe to 20% of the ordinary share capital of the purchaser.”
It further elaborated that the expected net gain to IGSB arising from the proposed disposal is approximately RM11.88 million taking into account the the apportioned original land costs of RM17.6 million and the property development expenditure of RM10.48 million.
Ivory said the disposal consideration, excluding IUSB’s portion of contribution of RM8 million, will be utilised for loan repayment and working capital.
“Barring any unforeseen circumstances, the proposed disposal is expected to be completed by first quarter 2025,” it added.
