Proposed YNH Land Disposal Positive for Perpetual Bondholders

• On 8 July 2026, YNH Property Berhad (YNH) announced the proposed disposal of a freehold commercial development land in Kuala Lumpur to Chin Hin Property (JSI) Sdn. Bhd. for RM455 million, comprising RM409.5 million in cash consideration and RM45.5 million in equity instruments.

• The disposal is intended to unlock the value of the asset and strengthen the group's financial position, with the cash proceeds primarily earmarked for the redemption of perpetual securities secured against the land, thereby reducing stepped-up coupon obligations and improving liquidity.

• The proposed land disposal involves land pledged as security for both outstanding perpetual securities (Table 1). While the disposal itself does not constitute an event of default, it triggers the security release provisions under the perpetual securities' covenants, requiring either a release and replacement of the charged asset or redemption of the securities. YNHP intends to satisfy these covenant requirements by using the disposal proceeds to fully redeem the outstanding perpetual securities, thereby enabling the security agent's charge over the land to be discharged upon completion.

• The proposed disposal is subject to the fulfilment of customary conditions precedent, including shareholders' approvals from both YNH Property Berhad and Chin Hin Group Property Berhad, relevant regulatory approvals and consents, state authority approval (if required), and the procurement of the amended development order (DO), which the purchaser intends to apply for in 3Q26.

• That said, if the conditions precedent are not fulfilled within the stipulated timeframe or any agreed extension period, the SPA may lapse or be terminated.

• As highlight earlier in YNH Property Quick Update - Exercises Option to Defer Perpetual Securities Coupon | Bondsupermart. YNH exercised its option to defer the perpetual securities coupon payment in January 2026. The deferral applies to both outstanding securities, namely Tranche 1 – YNHBMK 9.850% Perpetual Corp (MYR) and Tranche 2 – YNHBMK 8.850% Perpetual Corp (MYR), with a combined outstanding amount of RM350 million (Table 1).

• We view the proposed disposal as positive for YNH's perpetual bondholders. Once all required approvals are obtained and the transaction becomes unconditional, YNH is expected to use the disposal proceeds to redeem the outstanding perpetual securities, thereby discharging the security over the land.

• Revenue decreased by 58.0% YoY to RM13.3 million in 3QFY26 (Mar 2026) from RM31.4 million in 3QFY25 (Mar 2025), mainly due to lower revenue recognition from the property development and construction segments. The previous corresponding quarter was significantly boosted by the disposal of 163 Retail Park, while revenue in the current quarter was primarily derived from the disposal of development land in Mont Kiara, progressive profit recognition from the Solasta Dutamas project, and inventory sales at Manjung Point Seksyen II.

• Although the proposed disposal would significantly reduce long-term debt through the redemption of the perpetual securities. As of 3QFY26, group's available cash of RM22.4 million remains insufficient to fully cover its short-term debt maturities of RM379.8 million due within one year.

• Given YNH's average interest rate of approximately 8.4% in FY25 (30 June 2025), any refinancing of its short-term debt could be at higher interest rates. As such, YNH continues to rely on asset disposals to manage its debt obligations and support its working capital requirements.

• Overall, we maintain our negative view on YNH despite the proposed land disposal. Tight liquidity, subdued revenue recognition, and continued reliance on asset disposals to meet debt obligations remain key credit concerns.

• That said, we continue to closely monitor YNH’s financial performance and developments, where we periodically reassess and update our views as new information becomes available.

• For more insight on the potential land disposal, please look at YNH Property Berhad-Disposal of Land to Chin Hin.pdf

Table 1: YNH Perpetual Bond