Far East Enterprises (Penang) or Far East Penang, a subsidiary of Far East Group, has agreed to sell its property located at Lot No. 565, Seksyen 11W, Bandar George Town, Daerah Timor Laut in Pulau Pinang, Malaysia for a purchase consideration of RM2.38 million ($714,237.88).
On Sept 2, Far East Group announced that Far East Penang had entered into a sale and purchase agreement (SPA) with Oxford Capital for the freehold land, which comprises a lot area of approximately 233.179 sqm (2,509.92 sq ft), including a two-storey shophouse.
The property is presently rented to an unrelated third-party tenant where the group receives rental income. Under the SPA, the sale of the property is subject to the existing tenancy agreement.
According to Far East Group, the property is deemed to be a non-core asset with no foreseeable use.
The proposed disposal will see a net estimated positive cash inflow of some $653,000. After expenses, Far East Group’s gain on disposal stands at approximately $606,000.
On a pro forma basis, had the proposed disposal been completed on Jan 1, 2023, Far East Group would have reported a net loss of $3.1 million instead of $3.7 million for the FY2023 ended Dec 31, 2023. Its loss per share would have been reduced to 2.75 cents from 3.29 cents originally.
The property’s net asset value (NAV) stood at around 0.1% of the group’s total NAV of $41.5 million as at June 30.
Shares in Far East Group closed flat at 7.6 cents on Sept 2.
