19/06/2024 08:43 PM

KUALA LUMPUR, June 19 (Bernama) -- LBS Bina Group Bhd’s (LBGB) wholly-owned subsidiary in Hong Kong, Dragon Hill Corporation Ltd is disposing of its entire equity interest in Lamdeal Investments Ltd (LIL) to Huafa Urban Operation (HK) Ltd for RMB192.18 million (RMB1.00 = RM0.65).

In a filing with Bursa Malaysia, LBGB said under the deal, Huafa Urban shall also settle the outstanding loan owed by LIL to LBGB and its subsidiaries totalling RMB227.82 million upon the completion of the disposal and the handover of management rights to the Zhuhai International Circuit Ltd (ZICL), no later than Oct 31, 2024.

LIL owns a 60 per cent interest in ZICL, which operates China’s first permanent motor racing circuit in Zhuhai City, Guangdong Province.

LIL Group was acquired by Dragon Hill on Nov 7, 2013, with the original cost of investment of US$1.00.  

As of Dec 31, 2023, the net book value of LIL Group is approximately -RM54 million.

LBGB said the disposal of LIL would provide an opportunity to monetise its investments and focus on other opportunities.

“LIL Group has experienced yearly losses mainly caused by the amortisation of the land, and the racing circuit has encountered increasingly tough challenges due to increasingly stringent sustainability compliance requirements.

“These challenges include addressing noise-related issues where compliance with these regulations necessitates significant operational adjustments,” said LBGB.

It said the disposal will result in a pro-forma gain of approximately RM80 million, calculated based on the group’s latest consolidated audited financial statement for the financial year ended Dec 31, 2023 (FY2023), thus improving its net asset by approximately 10 per cent.

“This gain is expected to be recognised in FY2024. The proposed disposal is in line with LBGB’s strategy of preserving capital value and strengthening the balance sheet via realising cash resources, which can then be deployed in other projects and investments to maximise returns or for repayment of borrowings,” it said.

Meanwhile, trading of LBGB’s shares and warrants will resume at 9 am tomorrow after being suspended from 9 am to 5 pm today.




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