KUALA LUMPUR: Rapid Synergy Bhd's share price hit a high of RM1.46 a share today after the company said it agreed to a RM12.5 million liquidated damages condition in the sale of its Sri Hartamas land in view of costs to be incurred by the purchaser for plot ratio approvals and earth and clearing works.
The company's share price hit a high of RM1.46 a share in morning trade before settling 3.2 per cent higher to RM1.29 a share at midday break. Some 5.7 million shares changed hands.
Rapid Synergy signed an agreement to sell the land measuring 4,716 sq to Exsim Putra Permai Sdn Bhd for RM39 million. Rapid Synergy said in a Bursa filing on Jan 23, 2024, Exsim Putra will pay RM26.5 million in cash and the remaining RM12.5 million will be settled by way of contra of properties from the units within the project.
"The board is of the view that the salient terms of the sale and purchase agreement are reasonable given the opportunity to unlock the appreciating value of the underlying property," Rapid Synergy said.
The company was responding to queries from Bursa Malaysia Securities Bhd regarding details of the SPA, which included liquidated damages for reasons not attributable to any default, neglect or omission of the company and or the purchaser.
In its filing to Bursa Malaysia on Feb 2, Rapid Synergy said the properties envisaged for the contra arrangement comprise of serviced apartments.
"The selection will be based on the latest approved development order dated Aug 21, 2023 and Rapid Synergy has first choice of refusal in selection of the units," said the company.
In the event that the properties value fall short of the RM12.5 milion amount, Exsim Putra will pay Rapid Synergy the difference in value.
Rapid Synergy said the settlement in part cash and part contra, is in the best interest of the company.
"It ensures liquidity through the cash portion while leveraging the company's assets effectively through the contra portion. "This approach also aligns with the company's strategic interest in the project, allowing for future gains from the property development.
The land disposal is expected to be completed by the first quarter of next year.
Trading in the stock was halted for an hour on Friday, with trading resuming at 10am, following its announcement made on Feb 1, 2024. "-end-