APB Plans RM45 Million Shah Alam Tower Sale to Cut Debt and Annual Interest Costs
The vacant Menara APB would be sold to a Selangor investment company, with most proceeds earmarked for borrowings.
APB Resources plans to sell its vacant Shah Alam office tower for RM45 million cash, using most of the proceeds to repay borrowings and reduce the financing burden on its engineering equipment business.
The proposed buyer of Menara APB is Darul Ehsan Investment Group, a wholly owned subsidiary of Menteri Besar Selangor Incorporated. APB entered into a conditional sale and purchase agreement on Nov. 6, according to its announcement reported by Bernama.
The group expects to use RM37.07 million for debt repayment, RM5 million for working capital, RM936,000 for real property gains tax and approximately RM1.99 million for expenses related to the disposal.
It forecasts an estimated RM3.23 million net gain and annual interest savings of RM1.67 million. Those figures measure different effects: cash received from selling the building, the accounting gain after costs, and the recurring financing savings expected from repaying debt.
A Vacant Building and a Discount to Valuation
Menara APB is a 16-storey purpose-built office building with a four-level basement car park, The Edge reported. Its leasehold title runs to May 2100.
The RM45 million price is approximately 2.17% below the RM46 million market valuation by independent valuer Laurelcap dated Oct. 30. The property's net book value at March 31 was RM38.84 million, according to the report.
APB bought the property in 2024 for RM39.89 million. The tower is not generating rental income, leaving the group with an asset that ties up capital without a current rent contribution.
The proposed sale price exceeds the earlier purchase price, but the difference between those two headline amounts is not the forecast net gain. Taxes, disposal expenses and the accounting carrying value affect that calculation.
Why the Group Wants to Sell
APB said the property had been offered for sale for an extended period without a higher offer, according to the Star's account of the filing. It considered the discount to the appraised value reasonable in those circumstances.
The approximately 22-year-old building has a gross floor area of 21,318.4 square metres and net lettable space of 7,991.56 square metres. Those measurements describe different parts of the asset and should not be interchanged when considering its rental potential or price.
For APB, selling releases capital from a vacant commercial property and redirects it toward debt and operations. The company is involved in investment holding and the fabrication of custom-designed process and engineering equipment.
The announcement sets out the seller's use of the money. It does not establish how the buyer will occupy or redevelop the tower, and the transaction should not be described as creating a new public facility without a separate decision to that effect.
Debt Repayment Is the Main Use of Cash
Approximately 82% of the RM45 million consideration is earmarked for borrowings, based on the company's RM37.07 million allocation. The group reported RM93.47 million in outstanding borrowings as of Oct. 26.
APB said the repayment was expected to reduce gearing to 1.03 times, compared with 1.71 times at March 31, 2026. Its annual finance costs for the financial year ended on that date were RM6.41 million, against a net loss after tax of RM16.54 million.
The projected RM1.67 million annual interest saving is equivalent to roughly a quarter of that historical year's finance costs. It is a comparison of the stated estimates, rather than a forecast that all other financing expenses will remain unchanged.
Shareholders' approval and consent from the relevant state authority are still required. APB expects completion in the second quarter of 2027, subject to approvals and unforeseen circumstances. Until then, the debt reduction and savings remain anticipated benefits of a proposed disposal.