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PETALING JAYA (March 27): Tan Chong Motor Holdings Bhd (Tan Chong Motor) has officially completed the RM148.8 million disposal of nine plots of prime freehold land along Jalan Putra, strengthening its liquidity position following the monetisation of a non-core asset, according to a filing with Bursa Malaysia..
The completion, confirmed in a filing with Bursa Malaysia today (March 27), marks the end of a high-stakes asset monetisation exercise first announced in July 2025, and underscores the group’s ongoing balance sheet rationalisation.
A timely liquidity injection
The timing of the cash inflow comes amid the group’s broader balance sheet management efforts. Tan Chong Motor has previously disclosed upcoming financial obligations, including a RM150 million Sukuk Murabahah maturing in June 2026, though the company did not explicitly link the disposal proceeds to this obligation in its latest filing.
The proceeds are expected to support liquidity, particularly in a tightening credit environment, where the group — weighed by consecutive losses in its core automotive segment — could otherwise face higher refinancing costs.
Unlocking value from non-core assets
The transaction involves nine plots of freehold land located along Jalan Putra in Kuala Lumpur, a mature, high-traffic corridor within a built-up urban area.
No land size was disclosed in the latest filing. At a total consideration of RM148.8 million, the deal reflects the value of a contiguous city landholding, though no official price per sq ft benchmark was provided.
The buyer, Solid Interest Sdn Bhd (a subsidiary under the Avaland Holdings umbrella), was not described beyond its role as purchaser in the Bursa filing. No redevelopment plans were disclosed, although the consolidated site may offer flexibility for future higher-density development given its location and scale, and which can leverage it's proximity to established rail infrastructure.
Balance sheet optics vs operational pressure
While the disposal strengthens liquidity, it also highlights Tan Chong Motor’s ongoing reliance on asset monetisation to navigate operational headwinds.
The group had earlier approved a RM317.06 million revaluation surplus, boosting its net asset value by approximately RM0.48 per share, according to prior disclosures. However, this remains a non-cash uplift and does not directly address underlying earnings pressure.
Industry observations indicate plant utilisation across its Segambut and Serendah facilities remains low, reflecting structural under-capacity in its automotive operations.
Strategic pivot under scrutiny
Market attention is now shifting toward Tan Chong Motor’s execution strategy, particularly its efforts to monetise underutilised assets through industrial partnerships.
A key near-term catalyst is the anticipated commencement of contract assembly work tied to Perodua’s EV programme at its Serendah plant, which could improve utilisation rates and provide incremental income streams.
At the same time, the group is positioning its Nissan e-POWER hybrid models — including the Serena and upcoming X-Trail variants — to capture demand shifts arising from the expected RON95 subsidy rationalisation in April 2026.
Monetising the core
The completion of the Jalan Putra disposal removes an immediate liquidity overhang and buys Tan Chong Motor time — but at the cost of relinquishing a strategically located urban landbank.
The focus now shifts from balance sheet stabilisation to operational recovery. The utilisation of proceeds was not specified in the filing, and the group’s medium-term trajectory will hinge on whether it can translate asset rationalisation into sustainable earnings, either through improved plant utilisation or a meaningful turnaround in its automotive segment.
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