REG - Aseana Prop Ltd - Posting of 2024 Annual Report, Notice of AGM & GM

Aseana PropertiesAnnouncement

15/05/2025 07:00

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RNS Number : 7259I  Aseana Properties Limited  15 May 2025

 

 

15 May 2025

 

ASEANA PROPERTIES LIMITED

("Aseana" or the "Company")

 

Posting of 2024 Annual Report, Notice of Annual General Meeting

and Notice of General Meeting

 

Notice of Annual General Meeting

 

Aseana (LSE: ASPL), a property developer in Malaysia listed on the main market
of the London Stock Exchange, announces that its 2024 Annual Report and a
Notice of Annual General Meeting were posted to shareholders yesterday.

 

The Annual General Meeting will be held at Level 6M Boardroom, The RuMa Hotel
and Residences, 7 Jalan Kia Peng, 50450 Kuala Lumpur, Malaysia on 30 May 2025
at 4.30 p.m. Malaysia time (9.30 a.m. British Summer Time).

 

Notice of General Meeting

 

The Company also confirms that it posted a circular yesterday (containing a
notice of general meeting) (the "Circular") and a form of proxy to the
Company's shareholders setting out further details on the discontinuation
resolution for 2025 (the "2025 Discontinuation Resolution"), pursuant to the
Company articles (the "Articles").

 

The General Meeting will be held at Level 6M Boardroom, The RuMa Hotel and
Residences, 7 Jalan Kia Peng, 50450 Kuala Lumpur, Malaysia on 30 May 2025 at
4.00 p.m. Malaysia time (9.00 a.m. British Summer Time).

 

Extracts from the Circular are appended to this announcement.

 

The 2024 Annual Report, Notice of Annual General Meeting and Notice of General
Meeting can be obtained on the Company's website at
https://aseanapropertieslimited.com/ (https://aseanapropertieslimited.com/)
and have been submitted to the National Storage Mechanism to be made available
for public inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .

 

Enquiries:

 

 Aseana Properties Limited
 Leong Kheng Cheong                            kc.leong@aseanapropertieslimited.com

 Lim Tian Huat                                 thlim@aseanaplc.com

 Thong Kok Cheong                              kcthong@aseanaplc.com

 Allenby Capital Limited (Financial Adviser)   +44 (0) 20 3328 5656
 Nick Naylor / Nick Athanas / Ashur Joseph

 

LETTER FROM THE CHAIRMAN

1                 Introduction and background to the Proposal

When the Company was launched in 2007 the Board considered it desirable that
Shareholders should have an opportunity to review the future of the Company at
appropriate intervals. Accordingly, at shareholder meetings held since 2015,
and most recently held on 30 May 2023 (the "2023 General Meeting"), in
accordance with the Articles, the Board put forward a resolution to
Shareholders to determine if the Company should continue in existence.

At the 2023 General Meeting, Shareholders voted in favour of the Company to
continue in existence and to operate in accordance with the divestment
investment policy adopted by the Company at the 2015 AGM to enable the
controlled, orderly and timely realisation of the Company's assets, with the
objective of achieving a balance between periodically returning cash to
Shareholders and maximising the realisation value of the Company's investments
(the "Divestment Investment Policy"). At that meeting, Shareholders also voted
to approve certain amendments to the Articles requiring a further resolution
for Shareholders to determine whether the Company should continue, to be
proposed at a general meeting of the Company to be held in May 2025 (the "2025
Discontinuation Resolution").

The notice of general meeting appended to this circular convenes that general
meeting and this letter seeks to provide you with some further updates and
information in relation to the Company to help inform your decision on how to
vote on the 2025 Discontinuation Resolution to be proposed at the General
Meeting.

2                 Company update

Recent Developments and Strategic Priorities

Prior to 1 October 2024, the routine operations of the Group were supervised
by the Chairman and the Board (the "Previous Board"), supported by a small
team of finance professionals directly engaged to manage the Group's finances
and operations. A Divestment Director was also designated from among the
Previous Board members, with a specific focus on selling the Group's remaining
assets in accordance with the Divestment Investment Policy (collectively
referred to as the "Previous Management Team").

Between July 2024 and December 2024, significant changes occurred in the
composition of the Board. These included the departures of Mr Robert Donald
Minty (and his alternate director, Mr Mark George Nisbet), Mr Hock Chye Tan,
Mr Nicholas John Paris, Mr Thomas Holland, Ms Helen Wong Siu Ming ("Helen
Wong") and Ms Clare Mariam Binti Muhiudeen, as well as the appointments of
current board members, Dato' Dr Thong Kok Cheong ("Dr Thong") and Mr Lim Tian
Huat ("Mr Lim"). The small team of finance professionals and the divestment
team also left the Group following Helen Wong's departure.

In the fourth quarter of 2024, the Group was barely operational, having been
unable to recruit new professional managers and advisers due to the financial
position of the Company at that time. During this period, the proposed sale of
the Sandakan Hotel asset and the Harbour Mall Sandakan (together, the
"Sandakan Assets") was aborted due to lack of progress with the purchaser (as
announced by the Company on 9 October 2024). This led to ICSD Ventures Sdn Bhd
("ICSD"), the owner of the Sandakan Assets and an ultimate subsidiary of the
Group, being placed into receivership on 5 November 2024, following a default
on a Medium Term Notes programme by Silver Sparrow Berhad ("SSB"), another
ultimate subsidiary of the Group, rendering the outstanding principal sum of
RM61.0 million (c.US$13.5 million) and accrued interest due and payable
immediately.

During the same period, the short-term Directors' Loan (c.US$1.0 million),
raised by the Company in March 2024 from Helen Wong, Ms Jenny Lee Gyn Li
(spouse of Mr Thomas Holland) and RSMC Investment Inc. (collectively the
"Lenders"), was alleged to be in default on 29 November 2024, and the Lenders
indicated their intention to apply for an order to foreclose and force sell 30
units at the Ruma Hotel and Residences, owned by Urban DNA Sdn Bhd, an
operating subsidiary of the Group.

Both the aforementioned defaulted loans were due and payable immediately. The
Group was far from having sufficient cash to meet the repayment demands, as
such, is clearly in a financially distressed situation as at end of 2024.

Notwithstanding these challenges, with effect from 16 December 2024, Mr Lim
assumed the role of Independent Non-Executive Chairman and Dr Thong as a
Non-Executive Director of the Company while Leong Kheng Cheong, Chief
Executive Officer of the Company, joined the board with effect from 10
February 2025 (together referred to as the "New Board"). The New Board have
made relentless efforts to steer the Company and the Group in the right
direction during this critical period and forward in order to preserve value
for shareholders.

In light of the above, the business priorities of the Group are therefore
preserving its limited cash balances, safeguarding ownership of the remaining
assets to prevent destruction of value from distressed force sale activities
and critically raising funds and bank refinancing to elevate the Group from
its financial distress position. Asset divestment remains a strategic option
to the Board, but in a measured manner so as not to compromise shareholder
value.

Fund Raising Initiatives and Repayment of Bank Facilities

In light of the Group's financial performance, the need to recapitalise the
Group's balance sheet was intensified.

Accordingly, the Company has urgently executed fundraising initiatives
comprising the share subscription by the strategic investor, Neuchatel
Investment Holdings Limited ("Neuchatel"), and the disposal of treasury shares
in February 2025 and March 2025 respectively. These initiatives have
collectively raised approximately US$6.5 million for the Company.

A significant part of the net proceeds have been used to partially repay the
defaulted debt owed by SSB, reducing the outstanding loan principal to RM37.0
million (c.US$8.2 million) to forestall foreclosure actions initiated by the
Receivers and Managers of ICSD. The remaining balance of the repayment on the
defaulted debt owing by SSB is intended to be sourced through a new debt
financing from a local bank, of which the Company is at the stage of
finalizing the salient terms of the facility agreement.

The Group is also actively pursuing other new debt re-financing with other
financial institutions, and the progress of such discussions are promising
which the Group expects to finalise in the next few months.

Outlook

The participation of the strategic investor Neuchatel brings the Group
additional resources including business networks and banking relationships.
The New Board are working closely with the operating teams of The RuMa Hotel
and Residences and Harbour Mall Sandakan and the Group is now gaining momentum
to execute plans to re-finance the existing loans, re-open the Sandakan Hotel
and further improve the operating performances of The RuMa Hotel and
Residences as well as the Harbour Mall Sandakan. These efforts are expected to
significantly restructure the Group's debt profile and enhance its underlying
profitability and cash flow position. The New Board is seeing promising early
progress and is confident that the Group's financial health will be
resuscitated and emerge stronger.

3                 2025 Discontinuation Resolution

Notwithstanding the obligation on the Board to propose the 2025
Discontinuation Resolution pursuant to the Existing Articles, the Board firmly
believes that placing the Company into liquidation (which could be the result
of passing the 2025 Discontinuation Resolution) would have a significant
adverse impact on Shareholder value for the reasons set out below.

The Company believes that, in the event that the 2025 Discontinuation
Resolution is passed, an event of default under the lending covenants of
certain of the Company's facility arrangements could be triggered. If an event
of default is triggered, the relevant loans would become immediately
repayable, and this could result in security given to secure those loans being
enforced. This could lead to the banks foreclosing on the Group's loan
facilities and the Group's remaining assets being disposed of on behalf of the
banks rather than Shareholders at significantly lower prices than anticipated.
Further, this could force the Company to enter liquidation due to having
insufficient liquid assets to repay the facilities if proceeds from the
security that has been enforced are insufficient. The Group does not currently
have sufficient available cash to be able to repay the entirety of its loans
in the event they are accelerated.

The Company may not be able to achieve full value for the Company's remaining
assets if the 2025 Discontinuation Resolution is passed as prospective buyers
may seek a reduction to the prices at which they are willing to acquire the
assets in the knowledge that: (a) the Board would be under pressure to take
steps to wind up the Company as soon as practicable; and/or (b) if the passing
of the 2025 Discontinuation Resolution results in an event of default under,
and acceleration of, a loan secured by the Group's assets, such security may
be enforced and the assets may be realised at a value lower than that which
could be expected to be obtained if the assets were sold/offered to the market
in the Group's ordinary course of business.

In light of the severity of the possible consequences for Shareholder value,
the Directors are unanimously recommending that you vote AGAINST the 2025
Discontinuation Resolution.

Instead, the Board recommends that Shareholders allow the Company to continue
for a further 2 years in order to enable the Company to execute plans which
would significantly improve the Group's debt profile and enhance its
underlying profitability and cash flow position in the medium term. Asset
divestment remains a strategic option to the Board, but in a measured manner
so as not to compromise shareholder value.

The Board is clear that enabling the Company to continue, rather than placing
the Company into liquidation or seeking a "fire sale" of the Company's
portfolio at potentially significantly depressed prices, is in the best
interests of the Company and Shareholders as a whole.

In order to implement this proposal, the Existing Articles will need to be
amended. A blacklined version of the proposed amendment to the Existing
Articles is set out in the Appendix to this circular. The Existing Articles
and the amended Articles (together with a comparison document showing the
changes between the two) are available for inspection on the Company's website
at aseanapropertieslimited.com (https://aseanapropertieslimited.com/) and
during normal business hours on any weekday (public holidays excepted) at the
registered office of the Company at 1st Floor, Osprey House, 5-7 Old Street,
St. Helier, Jersey, JE2 3RG, Channel Islands.

The Directors are unanimously recommending that you vote FOR the resolution to
amend the Existing Articles which will allow the Company to continue until May
2027 and will be proposed as a special resolution.

4                 Additional considerations for Shareholders

In connection with the Proposal, Shareholders should be aware of the following
additional considerations:

●                there can be no guarantee that the result of
implementing the Proposal will provide the returns or realise the capital
sought by Shareholders. The Company's investments are illiquid. Accordingly,
if they are disposed of they may be disposed at a discount to their current
valuations. The eventual disposal price of the Company's remaining assets is
unknown, and it is possible that the Company may not be able to realise some
investments at any value; and

●                returns of cash will be made at the
Directors' sole discretion, as and when they deem that the Company has
sufficient assets available to return cash to Shareholders, subject to
applicable Jersey law. Shareholders will therefore have little certainty as to
when their capital will be returned. Distributions pursuant to the orderly
realisation programme are subject, amongst other things, to the Board being
able to give the necessary declaration(s) of solvency required by Jersey law.
Distributions under the orderly realisation programme are subject to the Board
continuing to be satisfied, on reasonable grounds, that the Company will, at
the time of distribution and for a period of 12 months thereafter, in respect
of each distribution, continue to satisfy the statutory solvency test. Returns
of cash may also in certain circumstances be subject, amongst other things, to
the Company obtaining the consent of one or more lenders to the Group.

5                 General Meeting

A notice convening the General Meeting, which is to be held at Level 6M
Boardroom, The RuMa Hotel and Residences, 7 Jalan Kia Peng, 50450 Kuala
Lumpur, Malaysia at 4.00 p.m. Malaysia time (9.00 a.m. British Summer Time) on
30 May 2025, is set out at the end of this document.

At the General Meeting, the 2025 Discontinuation Resolution will be proposed
as an ordinary resolution and will require a vote in favour by Shareholders
holding a majority of the Shares represented at the General Meeting, either in
person or by proxy, to be validly passed. The Directors are unanimously
recommending that you vote AGAINST Resolution 1 (the 2025 Discontinuation
Resolution).

Resolution 2 (the proposed amendment to the Existing Articles to allow the
Company to continue until May 2027) will be proposed, conditional on the
failure of Resolution 1 (the 2025 Discontinuation Resolution), as a special
resolution and will require a vote in favour by Shareholders holding not less
than two thirds of votes cast in order to be validly passed. The Directors are
unanimously recommending that you vote FOR Resolution 2.

Action to be taken by Shareholders

Shareholders are strongly encouraged to exercise their votes on the matters of
business at the General Meeting, either by attending the meeting in person, by
submitting a proxy appointment and giving voting instructions as set out on
the Form of Proxy or CREST members can also vote by utilising the CREST
electronic proxy appointment service in accordance with the procedures set out
in the Notice.

6                 Directors' recommendation

The Directors consider that the Proposal is in the best interests of the
Company and Shareholders as a whole.

Accordingly, the Directors unanimously recommend that you vote (1) AGAINST
Resolution 1 (the 2025 Discontinuation Resolution) to be proposed at the
General Meeting and (2) FOR Resolution 2 (to amend the Existing Articles).

 

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