News
Advance Synergy Berhad ("ASB") Proposed Sale And Leaseback (With Option To Re-Purchase) Of Holiday Villa Alor Setar, Holiday Villa Cherating And Holiday Villa Langkawi
BackApr 24, 2006
| General Announcement Reference No AS-060424-62363 |
| Company Name | : | ADVANCE SYNERGY BERHAD |
| Stock Name | : | ASB |
| Date Announced | : | 24/04/2006 |
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| Type | : | Announcement |
| Subject | : | ADVANCE SYNERGY BERHAD ("ASB") Proposed sale and leaseback (with option to re-purchase) of Holiday Villa Alor Setar, Holiday Villa Cherating and Holiday Villa Langkawi |
Contents :
Further to our announcement on 20 February 2006, we wish to inform the Exchange that the following arrangements have been entered into:- a. Alor Setar Holiday Villa Sdn Bhd ("ASHV") and Dato' Azman Shah Haron as trustee for Langkawi Holiday Villa Sdn Bhd ("LHV"), had each entered into a Supplemental Sale and Purchase Agreement ("Supplemental Sale and Purchase Agreements") with Amanah Raya Berhad ("Purchaser") to vary certain terms and conditions of the sale of their respective hotel properties known as Holiday Villa Alor Setar and Holiday Villa Langkawi ("the Hotel(s)"); and
b. ASHV and LHV had each entered into a Supplemental Lease Agreement with the Purchaser to vary certain terms and conditions pertaining to the leaseback of the respective Hotels and option to buyback the Hotels at the end of leaseback period. The terms and conditions of the sale and leaseback (with option to re-purchase) of Holiday Villa Cherating remain unchanged.
The principal variations to the terms and conditions of the sale of the Hotels pursuant to the Supplemental Sale and Purchase Agreements and Supplemental Lease Agreements (collectively referred to as the "Supplemental Agreements") are as follows:- a. The purchase price of Holiday Villa Alor Setar shall be increased from RM28 million to RM31 million and the purchase price of Holiday Villa Langkawi shall be increased from RM50 million to RM55 million ("Purchase Price"). The new purchase prices of Holiday Villa Alor Setar and Holiday Villa Langkawi are exactly the same as the market values stated by Colliers Jordan Lee & Jaafar (PG) Sdn Bhd in their valuation reports dated 6 December 2005 and 16 December 2005 respectively.
b. The leaseback period of the Hotels shall be for an initial term of 10 years with an option to renew the lease for a further term of 10 years instead of a renewal term of 5 years.
c. The average rental of both leases shall be 7% per annum on the purchase price of the Hotels for the initial term of 10 years as compared to an average yield of 7.5% per annum.
d. The price for the buyback of the Hotels shall be at the purchase price equivalent to the then prevailing market value of the Hotels determined based on the Discounted Cash Flow Method and the Comparable Method adopted by Colliers Jordan Lee & Jaafar (PG) Sdn Bhd in arriving at the Purchase Price of the Hotels and shall be subject to the then existing Guidelines on Real Estate Investment Trusts issued by the Securities Commission.
The earlier agreed price for the buyback by ASHV and LHV of the Hotels was RM29.0 million and RM53.0 million respectively.
Save for the aforesaid principal variations, all the other terms and conditions contained in the agreements dated 20 February 2006 entered into by the parties remain in full force and effective.
The Supplemental Agreements are available for inspection at the registered office of ASB from Mondays to Fridays (except public holidays) during normal office hours.
The entire proposal as varied by the Supplemental Agreements is expected to reduce the earnings per stock unit of ASB Group by approximately 1.5 sen for the financial year ending 31 December 2006 due mainly to the impact on taxation. Other than the above, no other material financial effects are expected to arise pursuant to the Supplemental Agreements.
None of the directors, major stockholders and/or persons connected with the directors and major stockholders of ASB has any interest, direct or indirect, in the variations pursuant to the Supplemental Agreements.
The Board of Directors of ASB, after careful deliberation, is of the opinion that the variations pursuant to the Supplemental Agreements are in the best interests of ASB.
This announcement is dated 24 April 2006.