K&N Kenanga Agrees to $45 Million Sale Leaseback of HQ in Kuala Lumpur

Business Times - November 18 2006

K&N Kenanga Holdings Bhd has proposed to sell and leaseback Kenanga International, the group's commercial building in Kuala Lumpur, to Injaz Asiaequity Property Bhd (IAPB) for RM165 million cash ($45 million.) The Kenanga group bought the 22-storey building at Jalan Sultan Ismail for RM107.5 million in 1998. As at December 31 2005, the audited net book value of the property is about RM129 million.

KMS will enter into a lease with IAPB for the 4th to 20th floors for 10 years for RM10.75 million per year, with an option to renew for a further five years. K&N Kenanga said the gross proceeds from the exercise will be used to reduce KMS' borrowings of up to RM30 million, increase the capital base of the company to attain investment banking status, partially finance its overseas ventures, and for working capital.

K&N Kenanga plans to form joint ventures, particularly in Saudi Arabia, to carry out securities and investment banking-related activities as part of its initiative to expand its investment banking and stockbroking business to reduce its dependency on the domestic market.

The sale and leaseback agreement is expected to be finalised by December 31 this year. Sphere: Related Content