APB Resources sells Menara APB for RM45 million to reduce debt

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APB Resources sells Menara for RM45 million

Highlights

APB Resources is selling Menara APB to Darul Ehsan Investment Group for RM45 million, a 2.2% discount to its RM46 million market value.
The sale proceeds will be used to repay RM37.1 million in bank borrowings, reducing the net gearing ratio from 1.67 times to 1.03 times.
The company expects to save RM1.67 million a year in interest payments, with the disposal expected to be completed in the second quarter of 2027, subject to shareholder approval.

This article was translated from the original. Read the original version by our correspondent here.

Transaction details and use of sale proceeds

According to The Edge Malaysia, in a filing with Bursa Malaysia, APB Resources has entered into a conditional sale and purchase agreement with Darul Ehsan Investment Group Bhd, a wholly owned unit of Menteri Besar Selangor Inc, for the proposed disposal of the property.

The leasehold building comprises 16 storeys of office space and a four-storey underground car park, with the lease expiring in May 2100. The RM45 million price represents a 2.2% discount to the RM46 million market value assessed by Laurelcap Sdn Bhd, while the property’s net book value as at 31 March 2026 was RM38.84 million.

APB Resources acquired the property in 2024 for RM39.89 million and said the building currently generates no rental income. The company expects to record a net gain of RM3.23 million from the sale after accounting for the initial investment value, real property gains tax and disposal-related expenses.

The sale proceeds will be used to repay RM37.1 million in bank borrowings, with the remainder allocated to working capital, real property gains tax and disposal-related costs. The proposed disposal is expected to be completed by the second quarter of 2027, subject to shareholder approval at an upcoming extraordinary general meeting.

Impact on leverage and market position

Following the loan repayment, the group’s net gearing ratio is expected to fall to 1.03 times from 1.67 times. As at 26 Oct, the group had RM93.5 million in borrowings, compared with RM10.82 million in deposits, cash and cash equivalents at the end of June.

The company said repaying the bank loan would save approximately RM1.67 million in annual interest payments. Berjaya Securities has been appointed as the principal adviser for the proposed property disposal.

APB Resources’ largest shareholder is Strategic A Holdings Sdn Bhd, with a 25.2% stake. The company is jointly controlled by chief executive officer Ong Kok Wah, financial controller Lee Lisa and deputy general manager Chan Fook Wah. At Friday’s close, APB Resources shares were unchanged at 14 sen, giving the company a market value of RM19.8 million, after falling more than 27% over the past year.

Propel Global’s diversification into property development was the focus of an earlier report, as the company planned to seek shareholder approval to expand beyond oil and gas services. We reported that its subsidiary had launched its first commercial project in Kuantan, with a gross development value of RM64 million and a targeted contribution of more than 25% to the group’s net profit in the future, as its financial performance remained under pressure and its annual losses widened.

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