Widad Group Bhd, a Malaysian company facing financial challenges, has decided to sell one of its office buildings in Kuala Lumpur at a loss to alleviate its debt burden. The 12-story property in Damansara Heights, which includes six floors of parking space, was sold for RM41.5 million to Richfield Builder, a subsidiary of Dhaya Maju Infrastructure. The deal is part of Widad’s strategy to streamline its finances and reduce liabilities.
The building, constructed nearly three decades ago, sits on a 1,607.73 sq m plot with a leasehold tenure expiring in 2073. Despite an audited net book value of RM39.69 million as of late 2023, the sale is expected to result in a loss of RM1.2 million. However, the company emphasized that the transaction will help lower its overall debt by RM40 million.
Proceeds from the sale will primarily be used to settle loans tied to the property while also bolstering working capital. While the disposal negatively impacts net tangible assets, Widad anticipates an improvement in its gearing ratio due to reduced borrowings.
The move reflects the company’s broader efforts to stabilize its financial position amid ongoing losses. By divesting non-core assets, Widad aims to strengthen its balance sheet and focus on future growth opportunities.