SP Setia said in a statement to Bursa Malaysia that the conditions precedent set out in the JV contract had not been met as at Wednesday.
It was announced earlier that the JV contract was conditional on getting the approval from China's Ministry of Commerce or the approval authority that it entrusted.
The first phase of the project, comprising commercial and residential units over five acres, was said to have a gross development value of RM500mil.
The signing of the contract with Hangzhou Ju Shen to form a limited liability JV company to develop and operate the mixed property development in the growth corridor of XiaoShan, Hangzhou, took place in October 2009. The period for fulfillment of the conditions precedent set out in JV contract had been extended several times since.
“The group still firmly believes that property development prospects in China are positive and will continue to look out for other suitable opportunities to invest in this exciting market. Investment funds originally earmarked for the Hangzhou project will be re-channelled accordingly when a suitable opportunity is identified,” SP Setia said.
It said the termination of the JV contract was not expected to materially affect the future earnings of the company as it constituted only a small part of SP Setia's overall business.
In a separate announcement to the exchange yesterday, SP Setia said its wholly-owned subsidiary, Setia Saigon East Ltd, and Saigon Hi-Tech Park Development Co had mutually agreed to extend the period for fulfillment of the conditions precedent set out in their cooperation agreement for a further 12 months to July 3, 2012 as certain conditions precedent had not been fulfilled.
Setia Saigon formalised the agreement with Saigon Hi-Tech Park to jointly design and develop a mixed project on 79 acres in Ho Chi Minh City in January 2008.
By The Star
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