APB Resources sells Menara APB for RM45m, to repay debt

APB Resources Bhd has agreed to sell its vacant Menara APB office building in Shah Alam to Darul Ehsan Investment Group Bhd for RM45 million cash. The proceeds will largely be used to repay borrowings, with the company expecting annual interest savings of RM1.67 million.

PETALING JAYA (Nov 7): APB Resources Bhd has agreed to sell its vacant Menara APB office building in Shah Alam to Darul Ehsan Investment Group Bhd for RM45 million cash, with most of the proceeds earmarked for debt repayment.

In a Bursa Malaysia filing on Friday (Nov 6), APB said it had signed a conditional sale and purchase agreement with the investment holding company, a wholly-owned subsidiary of Menteri Besar Selangor (Incorporated). The group plans to use RM37.07 million to repay borrowings, which it estimates would generate annual interest savings of RM1.67 million. Another RM5 million is earmarked for working capital, while RM936,000 and RM1.99 million are allocated for estimated real property gains tax and disposal expenses respectively.

APB said the proposed sale would monetise a non-core asset that is unoccupied, unused by the group and generating no rental income. The 16-storey purpose-built office building has four basement parking levels accommodating 195 bays. It stands on leasehold land with a provisional area of 3,025 sq m (about 32,561 sq ft or 0.75 acres) along Persiaran Perbandaran in Seksyen 14. The land, held under HS(D) 143324, PT 18 Seksyen 14, Bandar Shah Alam, has a lease expiring on May 11, 2100. The approximately 22-year-old building has a gross floor area of about 229,471 sq ft and a net lettable area of about 86,021 sq ft.

The disposal price represents a RM1 million, or 2.17 per cent, discount to the RM46 million market value assessed by independent valuer Laurelcap Sdn Bhd as at Oct 30, 2026. APB said it had sought prospective buyers over an extended period but received no higher offers. Securing suitable tenants and achieving satisfactory occupancy and rental yields could also require considerable time and expenditure, it added.

The group completed its acquisition of the property on April 4, 2024, for RM38 million. Its investment cost, including incidental acquisition costs, totalled RM39.89 million, while its audited net book value stood at RM38.84 million as at March 31, 2026. Using that book value and assuming the disposal had been completed on March 31, 2026, APB estimated a pro forma net disposal gain of RM3.23 million after estimated real property gains tax and disposal expenses.

The company said high finance costs had weighed on its financial performance. Finance costs totalled RM6.41 million for the financial year ended March 31, 2026, against a net loss after tax of RM16.54 million. APB said its gearing of 1.71 times at that financial year-end had constrained its ability to obtain additional financing for new projects and business opportunities. On a pro forma basis, after accounting for a subsequent private placement and the proposed disposal, gearing would fall to about 1.03 times.

The proposed debt repayment includes full settlement of the RM27.80 million outstanding term loan used to partly finance Menara APB's acquisition, RM7.88 million towards a loan used to partly finance its investment in Globetronics Technology Bhd, and RM1.40 million in revolving credit. APB said the purchaser had paid deposits totalling RM4.50 million to the property agent and solicitors, including RM2.25 million retained for real property gains tax purposes. Under the SPA, the RM40.50 million balance is payable within three months after the agreement becomes unconditional. An automatic one-month extension carries interest of 8 per cent per annum on the outstanding balance, calculated daily after the initial payment period expires.

The proposed sale is subject to shareholder approval at an extraordinary general meeting and state consent for the property transfer, as well as any other relevant approvals if required. Barring unforeseen circumstances and subject to the relevant approvals, APB expects the disposal to be completed in the second quarter of 2027.