KUALA LUMPUR (Oct 20): EcoFirst Consolidated Bhd is selling 15 retail units from its completed Liberty Arc @ Ampang Ukay mixed development project to major shareholder Tan You Tiong for RM23.82 million.
Tan owns a 2.92% direct stake and has 11.1% indirect shareholdings through his wife and Aspirewell Sdn Bhd, hence the divestment is deemed a related party transaction.
In a bourse filing on Friday, EcoFirst said the proposed disposal provides an opportunity for the company to realise the value of these properties, which have appreciated since the project’s completion in 2019.
The group said this divestment also provides an immediate cash flow, which can be channelled towards its business operations for working capital purposes.
Of the RM23.82 million proceeds, EcoFirst plans to allocate RM21.93 million for general working capital, RM50,000 for estimated expenses arising from this disposal, and RM1.84 million for the estimated real property gains tax.
“Some of the properties are currently rented out and generating rental income for the group. The proposed disposal is to streamline the group’s operations and free up capital used in non-core [activities] to be utilised in the group’s core business activities,” it added.
According to EcoFirst’s latest annual report, its second largest shareholder is executive director Datuk Teoh Seng Kian, owning a 5.3% stake, followed by his brother Teoh Seng Aun with a 5.11% stake.
Seng Kian and Seng Aun are brothers of EcoFirst’s other executive director Datuk Teoh Seng Foo.
Shares in EcoFirst closed half a sen or 1.4% lower at 34.5 sen on Friday, giving the company a market capitalisation of RM416.73 million.
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Source: EdgeProp.my
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