Magna Prima Bhd (MPB) is selling a four-storey commercial building located in Mukim Batu, Kuala Lumpur for RM56 million to help reduce its debts.
The developer said that its wholly-owned subsidiary Everhall Sdn Bhd has inked an agreement with Cowboy (KL) Sdn Bhd to dispose of the building which comes with a lower ground area designated for a supermarket and 345 car park bays.
In a filing with Bursa Malaysia today, Magna Prima said that it has no plan to operate the building.
Magna Prima said in view of the current Covid-19 pandemic, which has softened the economic sentiment, the sales consideration will be utilised for partial loan settlement of the company.
"The disposal will release resources tied up in unutilised property and realise the property at a fair market value whilst enhancing the company's working capital," it said.
Magna Prima said the sale price was arrived at on a willing-buyer willing-seller basis.
A valuation report was done on December 14, 2020, valuing the asset at RM60 million, it said.
Magna Prima said it expects the sale of the building to be completed within three months from the agreement date but the deadline could be extended by two months with interest at the rate of eight per cent per annum calculated on a daily basis or later date.