KUALA LUMPUR: LBS Bina Group Bhd’s (LBGB wholly-owned subsidiary in Hong Kong, Dragon Hill Corporation Ltd is disposing of its entire equity interest in Lamdeal Investments Ltd (LIL) to Huafa Urban Operation (HK) Ltd for RMB192.18 million (RM124.76 million).
LBGB said under the deal, Huafa Urban shall also settle the outstanding loan owned by LIL to LBGB and its subsidiaries totalling RMB27.82 million (RM) upon the completion of the disposal and the handover of management rights to the Zhuhai International Circuit Ltd (ZICL) no later than 31 October 2024.
LIL owns a 60% interest in ZICL which operates China’s first permanent motor racing circuit in Zhuhai City, Guangdong Province.
LIL Group was acquired by Dragon Hill on 7 November 2013, with the original cost of investment of US$1.
As of 31 December 2023, the net book value of LIL Group is approximately -RM54 million.
LBGB said the disposal of LIL would provide an opportunity to monetise its investments and focus on other opportunities.
:LIL Group has experienced yearly losses mainly caused by the amortisation of the land and the racing circuit has encountered increasingly tough challenges due to increasingly stringent sustainability compliance requirements.
“These challenges include addressing noise-related issues where compliance with these regulations necessitates significant operational adjustments,” said LBGB.
The disposal will result in a pro-forma gain of approximately RM80 million, calculated based on the group’s latest consolidated audited financial statement for the financial year ended 31 December 2023 (FY2023) thus improving its net asset by approximately 10%.
“This gain is expected to be recognised in FY2024. The proposed disposal is in line with LBGB’s strategy of preserving capital value and strengthening the balance sheet via realising cash resources, which can then be deployed in other projects and investments to maximise returns or for repayment of borrowings,” it said.
— BERNAMA
