Aspen (Group) Holdings’ indirect subsidiary, Aspen Vision City (AVC) has entered into a joint venture agreement (JVA) with Kerjaya Property JV (KPJV) to jointly develop the freehold land situated in Aspen Vision City, Batu Kawan. KPJV is a wholly-owned subsidiary of Bursa-listed Kerjaya Prospek Property Berhad.
The land measures 2.055 hectares or around 221,198 sq ft and is intended to be developed into a mixed development comprising hotel, residences, serviced apartments, retail units and office blocks. The development will be done via a special purpose vehicle (SPV) where KPJV will hold a 70% stake in the SPV and AVC will hold the remaining 30%.
AVC and KPJV also entered into a shareholders’ agreement on May 9 in respect of the SPV.
According to Aspen, the JVA is conditional upon the fulfilment of several conditions including AVC obtaining the consent from the Penang State Authority for the transfer of the land to the SPV. The JVA will also require the approval of Kerjaya Prospek’s as well as Aspen’s shareholders. These conditions have to be fulfilled within 90 days from the date of the JVA or any extended period mutually agreed by both parties.
Under the JVA, AVC is entitled to receive RM46.1 million ($13.2 million) by the SPV within three months of the date of the fulfilment of the JVA’s conditions. Of the sum, AVC will receive RM32.3 million in cash. The balance sum of RM13.8 million will be paid by the issuance of redeemable preference shares in the SPV.
The sum also puts AVC’s entitlement for the land at around RM160 per sq ft based on a gross area of some 288,367.2 sq ft. The sum also factored in the current market prices of land owned by AVC in the surrounding area and the land’s market value of RM47.0 million. The land was valued by KPJV’s valuer on May 9. The original cost of acquisition of the land is approximately RM11.1 million and the land’s book value is RM25.1 million as at June 30, 2023.
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According to Aspen, the development will create value for the group and will enhance its future revenue and earnings streams.
Divestment of stake in KHTP
On the same day, Aspen announced that it entered into a conditional share purchase agreement (SPA) with Kulim Technology Park Corporation (KTPC) to sell its entire stake in KHTP Assets. KHTP stands for Kulim Hi-Tech Park, an industrial park for high technology enterprises. The park spans 4,736 acres and is a national project that’s fully funded by the Malaysian Federal Government through the Ministry of Finance. Aspen owns a 70% stake in KHTP comprising 700 ordinary shares. It will divest its stake for a consideration of RM74.1 million.
Shares in Aspen last traded at 5 cents before its trading halt on May 9.
