PETALING JAYA, Jan 1: Tatt Giap Group Bhd has agreed to dispose of a 42,376.3 sq m piece of leasehold industrial land in Prai, Penang, to CSC Steel Sdn Bhd for RM41 million as part of the group’s debt reducing exercise.
In a stock exchange filing yesterday, Tatt Giap said it had created legal charges over the Prai property as security to Maybank for banking facilities granted to its 51% owned unit, TGSC as well as other companies within the group.
Tatt Giap said it had obtained approval from Maybank to release its security and legal charges over the property for a redemption sum of RM20 million, which will be used to reduce the banking facilities granted to TGSC.
TGSC will also use the balance of the proceeds to reduce its trade debts to CSC by RM21 million.
Upon completion of the proposed disposal, Tatt Giap said its indebtedness to TGSC would be reduced by RM41 million.
It said that the group indebtedness to TGSC refers to the outstanding receivable due from Tatt Giap and its group of companies totalling RM51.34 million as at Oct 31, 2015.
“In utilising the disposal price for repayment of its outstanding borrowings under the debt reduction exercise, Tatt Giap is able to accelerate the strengthening of the Tatt Giap group’s financial position,” it said.