Chin Hin Group Bhd’s wholly-owned subsidiary, PP Chin Hin Sdn Bhd (PP Chin), has entered into 17 conditional sale and purchase agreements with Chin Hin Building Materials Supply (JB) Sdn Bhd (CHBMS), to sell several properties for RM21.15 million.
In an exchange filing yesterday, Chin Hin noted the agreements involve the proposed disposal of five units of three-storey shop offices in Rawang, Selangor, for RM7.1 million; three units of three-storey shop offices in Gunung Indah, Kedah, for RM3.6 million; and nine units of three-storey shop offices in Mergong, Kedah, for RM10.45 million.
CHBMS is fully-owned by PP Chin Hin Realty Sdn Bhd, whose substantial shareholders include Datuk Seri Chiau Beng Teik – founder of Chin Hin, and Chiau Haw Choon – group MD of Chin Hin.
Of the total proceeds, RM15 million will be used to repay part of Chin Hin’s existing bank borrowings, which stood at RM385.01 million as at end-2017, while the remaining proceeds will go towards working capital and expenses for the proposed disposal.
This will allow the group to reduce its gearing level, improve cash flow position and enable it to borrow further, should new investment opportunities arise.
The disposal will allow Chin Hin to realise its investment in non-core assets at market value, and raise cash proceeds which can be channelled towards its business operations. The proposed disposal is expected to be completed by the fourth-quarter of 2018.