KUALA LUMPUR (Nov 6): Masterskill Education Group Bhd proposed disposal of properties today to reduce its gearing to zero, while not disrupting its business operation.

The corporate exercises include two types of property assets disposal — namely the campuses in Cheras, Kota Kinabalu, Kuching and Pasir Gudang — and the non-operating premises in Kota Kinabalu, Kota Bahru and Petaling Jaya .

The campuses are set to sell both proposed disposals to its controlling shareholder cum Executive Director Siva Kumar, or his nominated company.

The indicative sale consideration for operating property assets is proposed at RM75 million cash (subject to independent valuation), of which RM42 million will be used to repay all existing bank borrowings.

The surplus after repayment of bank borrowings will be retained as working capital. The current book value of these properties are RM74.2 million, while book value for non-operating property assets total at RM118.9 million.

Sale proceeds from non-operating property assets will be retained as working capital or distributed to shareholders as dividends, according to the announcement today.

To top that, Masterskill also proposed to leaseback the operating property assets, in order to continue its business operation.

“The proposed disposal will enable Masterskill to unlock its capital resources, which are locked up in long term assets,” it says.

Masterskill’s aim is to reduce its gearing to zero. According to its second quarter financial statement as at June 30, total liabilities stood at RM58.06 million.

On separate filings today, Masterskill also announced the resignation of its Chief Executive Officer Gary How Soong Khong, who is a Hong Kong-based businessman.

Together with How, his spouse Yap Yoke Chuan along with another Non-Independent Non-Executive Director Liew Kok Wai, had also both tendered their resignations in filings to the Bursa Malaysia.