Masterskill sell properties to director Siva Kumar

PETALING JAYA: Masterskill Education Group Bhd (MEGB) plans to dispose properties in Selangor and Johor to Brilland Property Sdn Bhd, a company controlled by major shareholder and executive director Siva Kumar M. Jeyapalan, for RM79.7 million cash.
MEGB's unit, Masterskill (M) Sdn Bhd, yesterday entered into two sale and purchase agreements with Brilland, where Siva Kumar holds a 59% stake and the balance 41% is held by his family via Transaction Opinion Sdn Bhd.
MEGB will sell its six-storey commercial building in Petaling Jaya for RM41.2 million; and freehold commercial land with interconnected office blocks and other buildings in Masai, for RM38.5 million.
"The proposed disposal, which is a part of the group's asset light strategy, would allow the group to unlock its capital resources tied in non-operating long term assets, to raise much-needed funds for its business," MESB told Bursa Malaysia yesterday.
MEGB will use the sales proceeds to pare down borrowings and fund its working capital.
Of the RM79.7 million, the group has allocated RM26.7 million to reduce its debts, which is expected to result in interest savings of RM1.4 million per year. The remaining RM53 million will be channelled towards operating, administrative and marketing expenses.
Upon completion of the disposal, MEGB will enter into a 10-year leaseback agreement with Brilland at a monthly rental of RM70,000 for the first 36 months, RM83,000 for the next 36 months, and RM95,000 for the subsequent 48 months until the completion of the tenure.