KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) is expected to complete by year-end the payment for its 70% stake in the joint venture with the Employees Provident Fund (EPF) to develop the RM8bil main town centre of the massive Kwasa Damansara township, thus making the partnership deal unconditional.
In a filing with Bursa Malaysia on Tuesday, MRCB also announced that the size of the Sungai Buloh land, coded as MX-1, was now slightly larger at 64.3 acres (compared to 64.07 acres previously) following a subdivision.
The balance subscription payment for its majority stake in Kwasa Sentral Sdn Bhd, the special-purpose vehicle to develop MX-1, has also been raised from RM735mil to RM737.88mil.
This balance (following an RM81.6mil advance payment) must be paid in full by Dec 29, or any other date agreed on in writing by the parties, said MRCB.
The latest revisions followed the signing of a second supplemental agreement between MRCB, Kwasa Land Sdn Bhd (the EPF unit tasked as Kwasa Damansara’s master developer) and Kwasa Sentral had on Tuesday.
The proposed share subscription in Kwasa Sentral was originally scheduled to be completed about two years ago - in the third quarter of 2015.
However, the target completion was moved to the second quarter of 2017 under a supplemental agreement inked between MRCB, Kwasa Land Sdn Bhd (the EPF unit tasked as Kwasa Damansara’s master developer) and Kwasa Sentral in August 2016.
Under the new supplemental agreement, the completion is aimed for the fourth quarter of 2017. The parties have also agreed that the interest payable to be set off against the subscription payments will only be up to and including May 11, 2017.
Both supplemental agreements were meant to give “MRCB the flexibility to finalise its financing arrangements to satisfy the balance subscription payment closer to the unconditional date.”
To recap, the town centre contract was awarded to MRCB in June 2014 following a bid involving 20 large, well-known developers. MX-1 was the first tranche given out under the RM50bil township project sprawling over 2,330 acres.
There was speculation, including by AmResearch, that MRCB was a frontrunner in the Kwasa Damansara project by virtue of it being an associate company of the EPF. (The retirement fund today holds a 33.5% stake in MRCB.)
The Kwasa Damansara project attracted a tremendous amount of interest, with the prequalification exercise reportedly drawing 152 developers.
Since MX-1, the EPF has awarded five more Kwasa Damansara development contracts - all for residential development - covering 53 acres with a combined gross development value of about RM2bil. The total acreage awarded up to now represents only 5% of the entire land area.
It was back in 2012 that the EPF announced it was buying the 2,330-acre Rubber Research Institute Land for RM2.28bil. The original plan was to develop the township over 10 to 15 years, with development to begin in 2013.
MRCB closed unchanged on Tuesday at RM1.68 per share, with 14.45 million shares changing hands. - The Star