Meda to sell The Summit Subang for RM260m

MAJORITY shareholders of property developer Meda Inc Bhd bulldozed their way for the sale of its well-performing mixed commercial complex at the company's extraordinary general meeting (EGM) yesterday.

The Summit Subang USJ in Subang Jaya will be sold to AmFirst Real Estate Investment Trust for RM260 million after majority votes approved the sale.

However, some minority shareholders met by reporters outside the EGM held at The Summit Hotel said they had voted against the sale of the commercial complex because the asset provided value to the company.

With current occupancy of the office tower at 100 per cent, the hotel at 64 per cent, and the retail complex at 93 per cent, the complex generates a gross annual income of RM36.12 million.

These shareholders also voiced their desire for dividend payments, which the company has not declared since 2003.

The company posted net losses of RM85.7 million against revenue of RM47.1 million for the nine-month period ended September 2007 due to soft property development activities for financial year ended December 31, 2007.

For FY06, Meda's net profit was RM15.65 million against revenue of RM153.57 million.

Meda aims to use the sales proceed of Summit Subang USJ to help retire bank borrowings of RM179.85 million while the balance will be used to grow its core business of property development.

The property, comprising the 15-storey Menara Summit office tower block, the 17-storey The Summit Hotel with 2,125 car-parking bays and a six-storey retail podium, carries a net book value of RM339.6 million as at December 31, 2006.

When met by reporters, company secretary Tai Siew May said the motion was carried through with 97 per cent of the votes, but declined to elaborate.

The board of directors also evaded questions posed by the press, who waited for them outside the EGM venue.

Some shareholders had disagreed with the method of voting, saying Meda could have opted for a show of hands instead of use a ballot.

However, when contacted later by Business Times, Tai said the Meda chairman had decided to have a poll because it was an important transaction that needed to be counted correctly. She would not comment further.

By New Straits Times (by Jeeva Arulapalam)