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One of the largest real estate transactions for the year 2023 will be the disposal of Pavilion Bukit Jalil for RM 2.2 billion to Pavreit. The transaction will finally see Malton Bhd cashing in the gain from the 51% joint venture of Regal Path Sdn Bhd, a subsidiary which holds the 50 acres prized shopping mall.
While the disposal of the shopping mall at book value RM 2.2 billion will result in the company losing money due to the cost of disposal and other related cost, it must noted that the price tag of RM 2.2 billion actually carries a profit of RM 200 million recognized earlier due to revaluation of the property.
In simple terms, Malton 51% ownership will see approximately RM 100 million of profit from the disposal process coming back to the company in the form of cash.
The payment term will be set out in the following manner
The full cash scenario will see RM 2.2 billion paid by cash, while the minimum cash scenario will be RM 1.6 billion in cash and RM 600 million worth in issuance of shares.
Pavilion Bukit Jalil started work in 2015. Loyal shareholder had held out from 8 years to see the fruit of the labour.
With the current share price lingering around RM 0.42 against the NTA of RM 1.87, there is certainly a big gap in the market price with the underlying value of the company. As the disposal of Pavilion Bukit Jalil is certainly to beef up the company cash level, there will be a very high chance to reward loyal shareholder with a special dividend as the last dividend Malton paid out is 2019.
Another catalyst for Malton will be the opening of Pavilion Damansara Height in May 2023.
I am obliged to inform you that I had invested in Malton due to
1. Current share price is at steep discount to NTA, and cheaper than the price 10 years ago
2. Potential special dividend to reward shareholder from Pavilion Bukit Jalil
