YONGNAM Engineering will sell a Malaysia plant in Nusajaya, Johor, to Axis Real Estate Investment Trust for RM153.5 million (S$60.1 million).
Based on a valuation report issued by CCO & Associates on March 19 this year, the market value of the property is RM167.5 million.
Upon the sale transaction, Yongnam Malaysia will remain the tenant of the property for a period of 15 years. This will follow the concurrent execution of the lease agreement entered between Yongnam Malaysia and the real estate investment trust, which is being held in escrow.
The two parties will endeavour to complete the sale transaction before Dec 31. The lease agreement becomes effective as of the completion date.
Yongnam said it has been exploring various avenues to improve and enhance its financial position. The sales transaction will unlock the equity tied in the property, and proceeds from the sale transaction will be redeployed into the group's working capital, and fund its investment in infrastructure developments in the region.