YNH looks to land disposal and property billings for RM170 million sukuk redemption

YNH Property Bhd intends to use proceeds from a Desa Sri Hartamas land transaction alongside property sales billings to redeem RM170 million in Sukuk Wakalah maturing on Feb 26, 2027. In a statement on Nov 10, the developer said completing the disposal documentation and obligations was a priority.

The funding plan follows a reserve-account shortfall that MARC Ratings classified as a technical default. The agency cut its rating for YNH's RM700 million Islamic Medium-Term Notes Programme from BB-IS to B-IS, placing the programme on MARCWatch Negative.

At Oct 27, YNH had RM54.4 million in the designated account, compared with a required RM61.2 million. The company said it was taking action to close the RM6.8 million gap within the contractual remedy period and remained focused on fulfilling monthly reserve requirements.

The proposed RM170 million sale involves a 5.1-acre parcel and buyer Sunway Living Space Sdn Bhd. YNH expects net proceeds of approximately RM105 million after repayment of a RM65 million loan secured against the property, with the amount subject to related costs and adjustments on completion.

Initially announced in May 2023, the transaction has suffered repeated delays. A sixth supplemental agreement signed by subsidiary Kar Sin Bhd moved the deadline for outstanding conditions to Dec 31, 2026. Sunway Living Space would have the right to terminate if the conditions are not fulfilled by that date.

YNH also expects billings at Solasta Dutamas in Kuala Lumpur and its Manjung, Perak, township developments to provide cash for completing projects and meeting financing obligations at group level.

MARC Ratings cited liquidity concerns, weak internally generated cash flow and dependence on asset sales for debt servicing. It also said the limited development pipeline constrained near-term earnings and operating cash generation, reducing YNH's ability to rebuild liquidity from its operations.