AIM drops Sabah shoplot purchase plan due to economic slowdown

KUALA LUMPUR (Jan 26): Advance Information Marketing Bhd (AIM) has decided not to proceed with the purchase of an arcade shoplot unit in Kota Kinabalu, Sabah from private property developer Sunsea Development Sdn Bhd.

In a filing with Bursa Malaysia, AIM said it had served a notice of termination to Sunsea for termination of both the Option Agreement and Supplemental Option Agreement on Jan 25, 2017.

Pursuant to the agreements, Sunsea will refund the option fee of RM2 million immediately upon expiry of the option period (Jan 25, 2017).

So far, the company has refunded AIM with RM1 million, with the remaining balance to be refunded in February 2017.

On April 27, 2016, AIM entered into an Option Agreement with Sunsea to purchase one unit of a 1,664 sq ft arcade shoplot at the Oceanus Waterfront Mall for a purchase price of RM4 million.

AIM had initially planned to open an outlet at mall for its HABA brand of beauty care products.

On Oct 26, 2016, both parties entered into a Supplemental Option Agreement to amend and vary certain terms of the Option Agreement, including the extension of the Option Period of an additional three months from the agreement’s expiry date.

AIM cited slowdown in the property market, no assurance in the tenure income, uncertainty in the property market values, as well as the weakening ringgit, as reasons for not proceeding with its purchase plan.

“There is no liability including contingent liability and guarantee to be assumed by [AIM], arising from the termination. The termination will not have any effect on the share capital and the substantial shareholders’ shareholdings of AIM,” the company added.

“The termination is not expected to have any material impact on the earnings, net assets and gearing of the company for the current financial year ending Dec 31, 2017,” it added.

AIM’s shares were untraded today. Its share price last closed 11.6% higher at 24 sen, for a market capitalisation of RM58.07 million. — theedgemarkets.com