Troubled Malaysia sells headquarters

Malaysia Airlines (MAS) has finalised its plan to sell its Kuala Lumpur property, Bangunan MAS, to Permodalan Nasional Berhad (PNB) for RM130 million.The Purchase Price of RM130 million was arrived on an “as is where is basis” following negotiations between the two parties on a willing-buyer willing-seller basis.

The property, a 35-storey office building with 5 levels of car park, fronting Jalan Sultan Ismail and Jalan Tengah with a net lettable area of approximately 270,071 square metre (75,036 square feet).

The Sales and Purchase agreement (SPA) between the national carrier and PNB was signed today.

Commenting on the sale, Malaysia Airlines’ Managing Director/CEO, Mr Idris Jala said, “The sale of the Property is part of our on-going disposal of our non-core assets to realize cash proceeds to support our Business Turnaround Plan initiatives.”

“The Proposed Sale will not have any effect on the issued and paid up capital of the company nor its Net Tangible Assets,” he added.

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Upon completion of the Proposed Sale, MAS will realize a gain of approximately RM46 million (after tax and other incidental expenses), and this is expected to increase Earnings Per Share by approximately 4 sen for the financial year ending 31 December 2006.

The approximate age of the Property is 21 years and was the former headquarters of MAS for its airline and ticketing business.

The aggregate cost of investment by MAS in the property is approximately RM91 million, an investment made from year 1983 onwards. The audited net book value of the Property as at 31 December 2005 was RM81,157,859.
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