MAS to sell academy to EPF for RM145m

[Alif A. F. 0]

10 Mar 2007

 

 

KUALA LUMPUR: Malaysian Airline System Bhd has agreed to sell a property that houses its training academy and information technology centre to the Employees Provident Fund.

 

The sale of the property in Kelana Jaya, including the freehold land the building is on, will be for RM145 million.

 

In a statement to Bursa Malaysia, the airline said it would use the cash to fund working capital and the deal was part of its turnaround plan to sell non-core assets.

It will then lease the same property from the EPF for five years, with an option to renew the duration of the lease for a further five years.

 

The proposed disposal is expected to be completed by year-end.

 

"The proposed leaseback is to give us more flexibility in choosing what are the best options for office consolidation in the future.

 

"This can help to maximise the yield and, at the same time, achieve the best price possible," the statement said.

 

MAS will make a gain of RM43.2 million after subtracting the property’s value of RM99.2 million in its books and another RM2.6 million in expenses for the deal.

 

An independent valuation of the property in October last year valued it at RM145 million.

 

MAS bought the property in 1989 for RM133.1 million.

 

The deal would need the approval of the Foreign Investment Committee and shareholders of MAS.

 

MAS has appointed RHB Investment Bank as an independent adviser since EPF holds 11 per cent of the airline, making it a related party.

[BC Tam 2]

"The proposed leaseback is to give us more flexibility in choosing what are the best options for office consolidation in the future.

Rather convenient for KWSP to be available to make the purchase - the infrastructure presumably have been purpose built. What would KWSP be left with if after five, or even ten years later, MH opts for the "office consolidation" option ?! Bear in mind the RM145m is part of yours and my retirement fund !!

 

Incidentally, bought 18 years ago for RM133.1m, sold now for RM145m. Return on investment (exclusive other costs) is 9% or roughly 0.5% per annum. Bank F/D rates nowadays is about 3+% pa If this investment is an example, no wonder Mr Jala is so keen to divest all non-core activities !!

[Sandeep G 1]

Interesting... given that the EPF Board is a shareholder of MAS too.. to be exact, the second largest shareholder in MAS at 10.72%...

 

Also, didn't the 34 storey iconic MAS Corporate HQ in the heart of KL's golden triangle sell for RM126 Million last year? so the MAS Akademi is worth more???

[Seth K 3]

Also, didn't the 34 storey iconic MAS Corporate HQ in the heart of KL's golden triangle sell for RM126 Million last year? so the MAS Akademi is worth more???

And yet I still see MH logo on the building, does it really sold?

[KK Lee 5]

 

Encouraged from higher than expected ‘profit’, understand MAS expenditure is budgeted to rise. In no time, expenditure will be more than revenue especially if ‘fuel surcharge’ can not be maintain.

 

[Alif A. F. 0]

And yet I still see MH logo on the building, does it really sold?

 

It is sold, but the news article quotes that MAS would still occupy the building by leasing it...