MAA Group to buy 58% stake in Turiya

by ASILA JALIL / pic credit:

MAA Group Bhd (MAAG) entered into an unconditional share sale and purchase agreement with Ithmaar Bank BSC to acquire 132.15 million shares or 57.78% stake in Turiya Bhd for RM23.79 million or 18 sen a share.

Upon the completion of the acquisition, MAAG will table a mandatory takeover offer to acquire all remaining Turiya shares it does not hold at a cash price offer of 18 sen per share.

The offer price is well below Turiya’s last traded price of 23.5 sen.

As at Aug 3, 2020, Turiya’s issued and paid-up capital stood at RM280.78 million.

For its financial year ended March 31, 2020, the group’s profit after tax came in at RM440.84 million, while its net assets stood at RM120.67 million.

The Turiya group, formerly Sitt Tatt Sdn Bhd, is involved in the business of letting off office lots and property management with an investment property known as Wisma Chase Perdana (WCP), which is a 12-storey freehold office building located along Changkat Semantan, Bukit Damansara in Kuala Lumpur (KL).

WCP has a total net lettable area of 245,238 sq ft and provides the group with a long-term sustainable rental income.

As reflected on Turiya’s latest unaudited consolidated financial statements for the financial period ended Dec 31, 2020, WCP comprises 84.8% of its total assets of RM168.9 million.

In its filing to Bursa Malaysia, MAAG stated that the acquisition is a strategic investment for the group as it is an opportunity for the group to acquire a controlling interest in Turiya at an attractive price, whereby the acquisition price of Turiya’s share of 18 sen per share is below Turiya group’s net asset per share of 53 sen as at Dec 31, 2020.

The acquisition also enables MAAG to own WCP, which is located in an upmarket neighborhood at an attractive valuation, as well as allowing the group to have a steady stream of rental income and profits.

“Given that WCP is strategically located in Damansara Heights with good accessibility and situated among some of the prime commercial locations such as Bangsar, Sri Hartamas and Mont Kiara, the board expects WCP would stand to benefit from the potential trend of companies seeking to relocate from the central business district of KL to decentralised areas such as Damansara Heights which offer similar office spaces at relatively lower rental rates,” it noted.

After the proposed acquisition, MAAG intends to work closely with Turiya to pursue active initiatives to enhance the value of WCP and to generate a sustainable and steady rental income stream from the said property through, inter-alia, renovation and refurbishment, office space remodeling (if required), and procuring quality tenants.

MAAG intends to maintain Turiya’s listing status on the Main Market of Bursa Malaysia Securities Bhd.

MAAG is cash rich following the sale of its 75% in takaful business to Zurich Insurance Co Ltd for RM364.4 million cash in 2016.

The company has used part of the money to buy HELP College of Arts and Technology Sdn Bhd, Scholastic IB International Sdn Bhd and a stake in Altech Chemicals Ltd.