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TMC Education to sell Peninsula Plaza strata lots for S$1.21 million loss

PRIVATE education firm TMC Education has finally found a potential buyer for two strata-titled lots at Peninsula Plaza but will have to book a S$1.21 million loss on the sale, it said in a Singapore Exchange filing on Thursday.

TMC said it has inked option agreements with the Foundation of Rotary Clubs, an Institution of a Public Character in Singapore, that allow the foundation to pay a total of S$S$4.46 million in three tranches for the lots. The properties' collective net book value was S$5.62 million.

The foundation has agreed to pay 1 per cent of the total price upon signing the option agreement, 4 per cent upon exercising the options to buy the lots and the remaining 95 per cent when the transaction is completed.

The two lots effectively consist of 10 strata units with 2,971 square feet of total area and about 813 years left on their 999-year leases.

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The sale price was within the range mandated by TMC's shareholders at an annual general meeting in Oct 30, 2015, the group said, adding that it planned to use the net proceeds of S$4.41 million for working capital and to repay its borrowings.

But it warned investors that there was no certainty the sale would happen. It had tried to auction off the two lots on Sept 22, 2015, but apparently did not get bids high enough to match its reserve price, which it did not disclose.

The group said in October 2015 that its auditor had raised "significant doubt" about the group's ability to continue as a going concern. Its auditor had pointed out that its current liabilities exceeded current assets by S$8.85 million as at June 30, 2015.

TMC shares are thinly traded. They last closed at S$0.088 on Wednesday.