Recent Trend of Sale And Leaseback Deals Involving Listed Companies

Published by slang July 15th, 2006 in Financial Strategy, Sources of Financing, Treasury

As discussed in my earlier articles on Sale & Leaseback or REIT, there are many reasons for such disposal which includes

• focusing on its core competencies;

• cash strap hence getting cheaper & larger funding to provide for working capital

• improving fixed assets utilization;

• realized gain from disposal of fixed assets;

• disposal of non-core fixed assets;

• interest saving as proceeds used to repay hefty debts;

• provides fund for bigger expansion;

• the ability to sell off core assets and at the end of the period still able to retain the assets ( clauses provided in the sale and leaseback arrangement)

Seller/Business	Buyer	Date Announced	Property	Indicative Price (Rm mil)
Advance Synergy ( Diverse)	Amanah Raya Bhd	13/12/05	3 hotels in Alor Star, Cherating & Langkawi	99.87
Seal Inc (Diverse)	Amanah Raya Bhd	23/12/05	Selayang Mall Shopping Centre	120
Aeon Co (M) (Retailer)	Equity Nirvana Sdn.Bhd	28/12/05	Kinta City Shopping Centre	121
C.I.Holdings (Manufacturer)	Amanah Raya Bhd	18/1/06	Industrial leasehold land with buildings in Bandar Baru Bangi	23
SEG International ( Education)	Amanah Raya Bhd	21/2/06	(i) SEGI College, Subang Jaya (ii) 2 commercial buildings in Serdang	48.3 19
AIC Corp (Manufacturer)	Amanah Raya Bhd	9/3/06	Leasehold land with offices & factories in Shah Alam	19
Silver Bird Group (Manufacturer)	Amanah Raya Bhd	27/3/06	Main manufacturing facility in Shah Alam	93.1
Tamadam Bonded Warehouse (Warehouse & distribution)	Amanah Raya Bhd	28/3/06	Leasehold land with industrial warehouse in Klang	31