YNH makes belated announcement about transactions involving its Segambut land
KUALA LUMPUR (April 29): YNH Property Bhd on Monday made a belated announcement about transactions involving its 6.49-acre land in Segambut, which it had inked an agreement in September last year to sell for RM59.58 million but revoked last week to have Chin Hin Group Property Bhd develop the plot in return for at least RM52 million.
YNH's proposed disposal of the plot and subsequent revocation of that deal first came to light last Wednesday, when Chin Hin announced that it had entered a development agreement with YNH's unit to develop a serviced apartment project with an estimated gross development value (GDV) of RM685.1 million on the plot.
Chin Hin had revealed that YNH had wanted to sell the land to Frazel Group Sdn Bhd — for which Frazel was supposed to have made an initial payment of RM25 million upon the execution of a sale and purchase agreement they inked — until it decided to forego the deal and have Chin Hin develop it instead.
Frazel is owned by Datuk Keh Chuan Seng and Cheong Kai Meng, according to YNH. Keh is also the largest shareholder of Tex Cycle Technology (M) Bhd and the executive chairman of stainless steel maker K Seng Seng Corp Bhd.
YNH's announcement came three months after the group made a delayed announcement relating to a land deal that took place in April 2022, which it had failed to disclose at the material time. That transaction, the acquisition of a land in Desa Sri Hartamas for RM150 million, was only disclosed in January this year after YNH's share price came under selling pressure and it got repeated queries from the authorities.
At the time, YNH said the delayed announcement was due to an “oversight” and that it had implemented internal controls to ensure that similar issues would not recur.
In its latest announcement, YNH said it was announcing the sale and purchase agreement it inked with Frazel and the deed of revocation of the deal now for "the purpose of ensuring open and transparent disclosure".
It said it had initially planned to monetise the plot that it acquired for RM23 million from New York Empire Sdn Bhd (NYESB) in 2007 — though NYESB had remained the registered proprietor of the land after the deal, while its unit Kar Sin Bhd was named the land’s beneficial owner — until it changed its mind in favour of roping in Chin Hin to develop the plot.
“The [development] agreement allows the company to quickly generate cash and capital from the land without engaging in the development process,” said YNH in a separate filing on Monday.
Under the development agreement, Chin Hin will complete the development of a multi-storey residential building comprising 2,434 units of serviced apartments, together with parking and other amenities.
In return for the development rights, Chin Hin will pay YNH RM52 million. If the GDV exceeds RM685 million, YNH said it will be entitled to an additional entitlement that is equivalent to 15.5% of the GDV, to be paid within 54 months.
YNH said it intends to use RM24 million of the proceeds to repay Frazel's deposit due to the cancellation of the SPA, and RM27.5 million to redeem the property from RHB Bank Bhd, to whom the plot is currently charged. Chin Hin had previously said it would be paying these parties on YNH's behalf, from the RM52 million due to YNH.
The project, said YNH, is estimated to cost RM575 million to develop. It is expected to commence in July 2025 and complete in June 2030.
Shares of YNH closed three sen or 6.67% higher at 48 sen, valuing the group at RM253.92 million.
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