Detailed Transaction Terms
Property Information
- Location: No. 8 Jalan Teknologi Perintis 1/3, Taman Teknologi Nusajaya, Iskandar Puteri, Johor
- Land Area: 47,469 sq. ft.
- Gross Floor Area: 31,052 sq. ft.
- Status: Freehold, currently used for precision machined components manufacturing
Financial Consideration and Payment Structure
- Total Consideration: RM12,800,000 (cash)
- Earnest Deposit: RM384,000 (3% of consideration), already paid by buyer
- Balance Deposit: RM896,000 payable upon execution of the Sale & Purchase Agreement
- Remaining 90%: Payable within 4 months from fulfillment of conditions precedent, with a possible 2-month extension at 8% p.a. interest
Conditions Precedent
- Shareholder approval for both disposal and leaseback at EGM
- Satisfactory legal due diligence by purchaser’s solicitors
Leaseback Terms
- Tenure: 3 years, renewable for another 3 years at market rates
- Monthly Rental: RM75,000 payable half-yearly in advance (approx. RM2.42 per sq. ft., at the low end of local industrial rates)
- Deposits: Rental deposit of RM450,000 (6 months), Utility deposit of RM37,500 (0.5 month)
- Vendor’s Obligations: All repairs, maintenance, and most outgoings except for quit rent and fire insurance (paid by landlord)
- Early Termination: Vendor must pay all unexpired term rent if tenancy is ended early
Strategic Rationale and Shareholder Implications
- Unlocking Asset Value: The sale allows Santak to realize the fair market value of its property investment without operational disruption, avoiding relocation and downtime costs.
- Enhanced Liquidity: The net proceeds of RM12.32 million will strengthen the Group’s cash position, supporting working capital and resource optimization.
- Favourable Rental Terms: Leaseback rental is at the lower end of market rates, limiting expense increases relative to depreciation savings post-disposal.
- Positive Financial Metrics: NTA per share rises from 6.92 to 7.34 Singapore cents, and projected loss per share (FY2025) narrows from 2.22 to 1.99 Singapore cents.
- Low Business Risk: No adverse change to the Group’s risk profile is expected, and the transaction does not contravene any applicable laws or regulations.
Potential Price-Sensitive Information
- The transaction constitutes over 50% of the Group’s net asset value and market capitalization, making it a major transaction likely to impact share price upon completion or if not approved by shareholders.
- Significant improvement in financial flexibility and potential for enhanced shareholder value post-disposal.
- Shareholder approval is a critical milestone; failure to secure it would nullify the transaction.
Next Steps
- Execution of definitive Sale & Purchase and Tenancy Agreements within 30 working days from 21 May 2026, subject to buyer’s completion.
- Shareholder EGM to approve the disposal and leaseback; further details of the buyer and finalized agreements will be announced upon execution.
Inspection of Documents
Shareholders may inspect the Offer to Purchase and Valuation Report at the Company’s registered office for three months from the date of announcement.
Directors’ Statement
The Board collectively and individually accepts full responsibility for the accuracy of all disclosures in relation to the proposed transaction.
Disclaimer
This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell shares in Santak Holdings Limited. Please consult your professional advisor before making any investment decisions.
