Due to the buyers’ failure to make full payment, a deal worth RM7.41 billion (US$1.7 billion) that was supposed to lighten the debt burden of 1Malaysia Development Bhd (1MDB) did not proceed as planned, reported the New Straits Times.
In December 2015, a consortium consisting of Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC) signed a share sale agreement (SSA) with TRX City Sdn Bhd, a wholly-owned unit of the Ministry of Finance but was formerly known as 1MDB Real Estate Sdn Bhd, previously a subsidiary of the troubled 1MDB state fund.
The deal, which saw the buyers fork out a 10 percent down payment, pertained to the purchase by IWH and CREC of a 60 percent stake in Bandar Malaysia Sdn Bhd, the master developer of Bandar Malaysia, a massive prime land situated on the former site of the Kuala Lumpur Air Base in Sungai Besi.
With a gross development value of around RM150 billion, this choice property will also house the terminus of the highly-anticipated Singapore-Kuala Lumpur High Speed Rail (HSR).
“Despite repeated extensions being granted, IWH CREC failed to meet the payment obligations outlined in the conditions precedent under the SSA. As a result, the agreement between the parties stands null and void with immediate effect,” said TRX City in a statement.
As a result, TRX City will immediately invite expressions of interest from those interested in becoming the master developer of Bandar Malaysia. Moreover, the Ministry of Finance will retain the 60 percent stake in Bandar Malaysia as well as the 40 percent interest it originally intended to keep.
Meanwhile, the IWH-CREC consortium said the reasons stated by TRX City for scrapping the deal “does not fully and accurately reflect the circumstances and conduct of the parties in this matter.”
“We take this matter very seriously and is at present reviewing the content of the termination notice and press release, with advisors and legal counsel,” it said, adding that it will make further announcements in due course.
Other mega and colossal projects with residential developments include:
MET 1 Residences @ KL Metropolis
Lucentia Residences, Bukit Bintang City Center
Image sourced from NST
Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email radin@propertyguru.com.my
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