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PETALING JAYA (April 16): Chin Hin Group Property Bhd (CHGP) today issued a circular to shareholders in relation to the proposed joint venture (JV) between BKG Development Sdn Bhd (BKGD), a wholly-owned subsidiary of CHGP, and Fiamma Holdings Bhd (FHB), for a mixed commercial development in Kuala Lumpur.
The proposed transaction
In its Bursa announcement today (April 16), it said that pursuant to the shareholders agreement dated April 17, 2025, BKGD will subscribe for 1,166,667 new ordinary shares in Sinaran Urusjuta Sdn Bhd (SUSB), a wholly-owned subsidiary of FHB, representing 70.0% of the enlarged issued ordinary share capital of SUSB, at an issue price of RM1.00 per share, for a total cash consideration of RM1,166,667.
Upon completion of the shares subscription, FHB's equity interest in SUSB will be diluted from 100.0% to 30.0%.
As compensation for this dilution (the "diminution"), BKGD will pay FHB a cash sum of RM442,000 within three months from the unconditional date of the shareholders agreement.
Post-completion shareholding structure of SUSB:
1) FHB: From 100% (500,000 shares) reduced to 30% (500,000 shares)
2) BKGD: From nil to 70% (1,166,667 new shares)
3) Total enlarged share capital: 1,666,667 shares
BKGD will thereafter cause and procure SUSB to repay and/or redeem a total estimated settlement amount of RM146.07 million as at Feb, 28, 2025 (and RM196.04 million as at the latest practicable date of March 31, 2026) owed by SUSB to FHB and its subsidiaries, with the final amount to be determined upon completion of the KLCC 2 Project.
The land and the KLCC 2 Project
The land subject to the development is held under H.S.D 123392, PT 50000, Seksyen 44, Bandar Kuala Lumpur, Daerah Kuala Lumpur, Negeri Wilayah Persekutuan Kuala Lumpur (the "land").
The land is a leasehold vacant commercial land with a tenure expiring on Sept 18, 2122, with a land area of 7,613 sq m (approximately 81,946 sq ft).
The market value of the land is RM161.00 million as appraised by Henry Butcher Malaysia Sdn Bhd as at Oct 23, 2025, against a net book value (NBV) of RM150.84 million as at 28 February 2025.
The proposed development, known as the KLCC 2 Project, comprises:
a) 2 blocks of serviced apartments totalling 1,033 units, ranging from 502 to 7,782 sq ft
b) 3 units of retail space
c) 6-storey common facilities floor
d) 2-storey mechanical space
e) Podium and car park block
Key project metrics:
I) Estimated GDV: RM1,359,500,000
II) Estimated GDC: RM1,052,789,000
III) Estimated gross development profit (net of 24.0% corporate tax): RM233.10 million
IV) Expected project launch date: 2Q2026
V) Expected completion date: 4Q2031
VI) Development order from DBKL obtained: Feb 20, 2026
VII) Building plans submitted to DBKL: March 19, 2026
Settlement amount and funding
As at the latest practicable date (March 31, 2026), the settlement amount comprises:
*SUSB advances (as at Feb 28, 2025): RM26.87 million
*SUSB additional advances (up to latest practicable date [LPD]): RM49.97 million
*Redemption of RCPS issued by SUSB to FHB: RM119.20 million
*Total settlement amount as at LPD: RM196.04 million
The RM303.00 million bank borrowings to be obtained by SUSB upon completion of the shares subscription will be utilised as follows:
*RM100.00 million for partial repayment to FHB
*RM203.00 million for funding the KLCC 2 Project
The SUSB additional advances of up to RM50.00 million bear interest at 8.0% per annum from the completion of the shares subscription up to the completion of the KLCC 2 Project, with the total interest (SUSB remaining interest) estimated at up to RM30.00 million.
CHGP has provided a corporate guarantee in favour of FHB, guaranteeing BKGD's compliance with and performance of its obligations under the shareholders agreement.
Total cost of acquiring 70% equity interest
The total cost to CHGP in acquiring 70% equity interest in the KLCC 2 Project is summarised as follows:
*Shares subscription consideration (payor: BKGD): RM1.17 million
*Cash payment for diminution compensation (payor: BKGD): RM0.44 million
*Redemption of existing redeemable convertible preference shares [RCPS] (payor: SUSB): RM119.20 million
*Payment of SUSB advances (payor: SUSB): RM26.87 million
*Payment of SUSB additional advances (payor: SUSB): RM49.97 million
*Payment of SUSB remaining interest (payor: SUSB): RM30.00 million
*Total: RM227.65 million
BKGD's immediate cash outlay is RM1.61 million (items 1 and 2 above), funded from internally generated funds.
Proforma financial effects on CHGP
The proposed JV does not involve the issuance of any new CHGP shares and will not affect CHGP's issued share capital or substantial shareholders' shareholdings.
Based on the audited consolidated financial statements of CHGP as at Dec 31, 2024, and assuming the proposed JV had been effected on that date, the proforma effects are as follows:
*Proforma gearing ratio increases from 0.85 times (after adjusting for subsequent events) to 1.48 times, mainly due to additional borrowings of RM303.00 million and consolidation of SUSB's debts
*Proforma profit after tax (PAT) attributable to owners of CHGP decreases from RM23.33 million to RM11.48 million, after accounting for: (i) additional interest expense of RM11.51 million net of 24% tax on the RM303.00 million borrowings at an assumed effective interest rate of 5.00% per annum; and (ii) estimated expenses of the proposed joint venture of RM0.33 million
*Proforma earnings per share (EPS) decreases from 1.68 sen to 0.83 sen based on 1,386,495,000 shares (excluding treasury shares)
Related party transaction and interested parties
The proposed JV is a related party transaction pursuant to Paragraph 10.08 of the Main Market Listing Requirements (MMLR) of Bursa Malaysia. The interested parties are:
*Chin Hin Group Bhd
*Datuk Seri Chiau Beng Teik JP
*Datuk Wira Chiau Haw Choon
*Shelly Chiau Yee Wern
The interested directors — Datuk Seri Chiau Beng Teik, Datuk Wira Chiau Haw Choon, and Shelly Chiau Yee Wern — have abstained from deliberation and will abstain from voting on the resolution pertaining to the proposed JV at the EGM.
Approvals required
The proposed JV is subject to approval from:
*Shareholders of CHGP at the EGM to be convened
*Shareholders of FHB at the EGM to be convened
*Financiers of SUSB, if required
*Any other relevant authorities, if required
The highest applicable percentage ratio pursuant to Paragraph 10.02(g) of the Main Market listing requirements (MMLR) is 30.1%.
Independent adviser's conclusion
BDO Capital Consultants Sdn Bhd (BDOCC), appointed as independent adviser, concluded that the proposed joint venture is fair and reasonable and not detrimental to the non-interested shareholders of CHGP, and recommends that non-interested shareholders vote in favour of the ordinary resolution pertaining to the proposed joint venture at the forthcoming EGM.
EGM details
*Date and time of EGM: Thursday, May 21, 2026 at 12.00 pm.
*Venue: Stellarium, Level 19, Menara Chin Hin, 8th Stellar, No 1, Jalan Naga Emas, Sri Petaling, 57000 Kuala Lumpur
*Last date and time for lodging form of proxy: Tuesday, May 19, 2026 at 12.00 pm.
*Proxy forms to be deposited at: CHGP's registered office, Suite 16.06, MWE Plaza, No. 8 Lebuh Farquhar, 10200 George Town, Pulau Pinang
*Record of depositors (ROD) date for eligibility to attend and vote: 14 May 2026
*Voting method: By way of poll, pursuant to Paragraph 8.29A(1) of the MMLR of Bursa Malaysia
Editor’s note: All information above is sourced exclusively from the Circular to Shareholders of Chin Hin Group Property Bhd dated today (April 16), including Part A and the independent advice letter (Part B) by BDO Capital Consultants Sdn Bhd. This article is for informational purposes only and does not constitute financial or investment advice.
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