KUALA LUMPUR (Aug 24): Vizione Holdings Bhd is buying property development company Midlands City Sdn Bhd for RM38 million cash in a related party transaction.

Vizione’s managing director Datuk Ng Aun Hooi is the largest shareholder of Midlands City holding a 62% stake. The other shareholders are Ting Hing Khok (10%) and Ng Kok Kiang (28%), according to the filing with Bursa Malaysia.  

Vizione said the proposed acquisition represents an opportunity for the group to expand its property development segment by gaining access to the development rights held by Midlands City on the development land, which consists of three parcels of freehold land in Semenyih, Selangor, with a total size measuring 79,360 square metres.  

As at the latest practicable date (Aug 5), Midlands City has commenced phase one of the development and is 29.2% completed whilst phase two and phase three of the development are at the planning stages.

Under phase one, the development consists of two blocks of 28-storey small office/home office (SOHO) buildings comprising 772 units of SOHO, 70 units of shop lots, one 21-storey block  comprising 224 units of serviced apartments and two private colleges.  

Midlands City is a loss-making company. For the financial year ended June 30 (FY22), its loss after tax attributable to owners increased to RM3.34 million from RM2.02 million in FY21 on the back of lower revenue. Its revenue came in lower at RM6.78 million in FY22 compared with RM9.52 million. It said the lower revenue was due to less work completed as a result of Covid-19.

Vizione said the purchase consideration and the development will be funded via a combination of internally-generated funds and/or bank borrowings.

The proposed acquisition, which is subject to shareholders’ and relevant authorities’ approvals, is expected to be completed by the fourth quarter this year.  

Last month, Vizione’s cumulative net profit for the six months ended May 31, 2022 (6MFY22) came in at RM780,000, down by 74.5% from RM3.06 million a year ago. Revenue also shrank 11.8% to RM141.61 million from RM160.64 million.

Shares in Vizione closed unchanged at six sen, giving it a market capitalisation of RM123 million.