Rapid Synergy says buyer of its Sri Hartamas land will pay in cash and property units

Jan 24, 2024

KUALA LUMPUR (Jan 23): Rapid Synergy Bhd, which came into the spotlight in recent days amid a sharp fall in its share price, has given more details of the freehold land in Sri Hartamas that it is diposing of for RM39 million.
The industrial mould manufacturer said it signed an agreement on Tuesday to sell the land, measuring 4,716 sq m, to Exsim Putra Permai 45 Sdn Bhd.
Exsim Putra, a property developer, intends to develop serviced apartments and retail units on the land. It will pay RM26.5 million in cash, while the balance RM12.5 million will be settled by way of contra of properties from the units within the project, said Rapid Synergy.
“The proposed Sri Hartamas disposal represents an opportunity for the group to unlock and realise the appreciating value of the property to realise cash flows to fund working capital and repay its bank borrowings,” the group said in a bourse filing
It added that following the land disposal, it expects to experience a one-off gain of RM25.84 million.
The group intends to largely use the proceeds to redeem its loan from CIMB Islamic Bank Bhd totalling RM16 million and to finance its working capital amounting to RM6.12 million.
The land disposal is expected to be completed by the first quarter of next year, it added.
On Monday, Rapid Synergy said it was in the final stage of negotiations for the sale of the land in Sri Hartamas which it had mentioned in an earlier response to an unusual market activity query from Bursa Malaysia.
Rapid Synergy — in which prominent investor Datuk Dr Yu Kuan Chon holds a 22.8% stake — closed limit down at RM1.95 on Monday, after plunging 83 sen or 29.86%.
On Tuesday, the counter finished unchanged at RM1.95, giving the group a market capitalisation of RM208.45 million. Year-to-date, the battered stock has plunged 93% or RM26.53. Some RM2.81 billion market capitalisation has eroded.
Rapid Synergy’s net profit has been trending down over the past three years. It made a net profit of RM1.74 million for the 18 months ended June 30, 2023 (FY2023), much lower than the RM3.46 million reported for FY2021 and RM5.2 million for FY2020, despite the expanded financial period due to the group’s change in financial year-end to June 30 from Dec 31.
The group kicked off FY2024 with a net profit of RM13.85 million for the three months ended Sept 30, 2023, boosted by a gain from the disposal of investment properties.
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Source: EdgeProp.my