NETX PROPOSES TO TAKE OVER SUNGAI WANG PLAZA, SUNGEI WANG HOLDINGS

KUALA LUMPUR, Sept 3 -- NetX Holdings Bhd has proposed to acquire the entire stake in Sungei Wang Plaza Sdn Bhd (SWP) and Sungei Wang Holdings Sdn Bhd (SWH) for RM20.

Both SWP and SWH, which are engaged in property and investment holding, owned properties that are strategically located in Sungei Wang Plaza.

In a filing with Bursa Malaysia today, NetX said it had entered into a share sale agreement (SSA) with Sungei Wang Group Sdn Bhd for the proposed acquisition of 1,000 ordinary shares and 9.8 million irredeemable convertible preference shares in SWP, representing a 100 per cent stake in SWP at RM10.

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The company said it also entered into another SSA with Tan Peng Koon and Chew Hui Khuan for the proposed acquisition of 60,002 ordinary shares in SWH, representing a 100 per cent stake in SWH, as well as 23.34 million new ordinary shares to be issued by SWH to Tan, at RM10.

On the purchase consideration of RM10 for the proposed acquisition of SWP and RM10 for the proposed acquisition of SWH, NetX said that was arrived at on a willing-buyer willing-seller basis after taking into consideration that the two retail units in Sungei Wang Plaza owned by SWP are valued at RM2.9 million and four retail units in Sungei Wang Plaza owned by SWH are valued at RM29.9 million.

Pursuant to the debt settlement letter dated May 19, 2021 issued by AmBank Islamic Bhd (AmBank), the High Court has given judgment in favour of AmBank whereby SWP was required to pay to AmBank the judgment sum of about RM38.2 million as of April 30, 2020, together with the continuing accruing late payment charges.

On the rationale of the exercises, NetX said over the medium and long term, the properties have strong potential for capital appreciation given the strategic location of Sungei Wang Plaza and the involvement of Capital Land Malaysia Mall Trust which are the biggest owners of retail outlets in Sungei Wang Plaza, which had upgraded the common area of the Sungei Wang Plaza. 

“If held over a period of time until the property market improves, the capital gains from the properties will give a good return on investment for NetX.

“In addition, the proposed acquisitions will give NetX a recurring source of revenue on rental income,” it added.

NetX said upon the completion of the proposed acquisitions, which are expected to be completed by the fourth quarter of 2021, both SWP and SWH will become wholly-owned subsidiaries of NetX.

-- BERNAMA