Mah Sing told Bursa Malaysia that it had filed a summons on Tuesday at the High Court to apply for an injunction concerning the joint venture land.
On Aug 2, Mah Sing had entered into a 60:40 joint venture with Asie to develop the parcel into a mixed development, tentatively called M Sentral, with a gross development value of RM900mil.
Mah Sing would pay RM106.6mil for the parcel, to be settled via 60% cash and a 40% stake of the joint venture company to Asie.
Usaha Nusantara is a wholly-owned subsidiary of Asie, which is the concession holder for 58 acres of leasehold land slated for urban regeneration under the Blue Corridor policy of Kuala Lumpur City Plan 2020.
The 58-acre land includes the joint venture land, which is part of the urban regeneration area of the Tunku Abdul Rahman flats or popularly known as the Pekeliling flats.
However, Asie has taken the position that the joint venture agreement had lapsed on Dec 2 given that certain conditions precedent (CP) in it were not met.
Mah Sing, however, maintained that the agreement had not lapsed, given that they had waived certain CP.
In a statement to StarBiz, Mah Sing group managing director and group chief executive Tan Sri Leong Hoy Kum said: “Mah Sing has exercised its rights as provided in the joint venture agreement to waive the CP and proceeded with the transaction, and has also filed a civil suit for specific performance on the CP. We shall make further announcements when more details are available.”
Property analysts said the potential loss of the joint venture deal would not have a significant effect on Mah Sing.
“The proposed M Sentral project is not really big when compared with some of Mah Sing's projects in the pipeline,” said a bank-backed analyst.
Kenanga Research said in a recent note that if the project did not go through, there was no material impact on its financial year 2011 - 2012 net income of RM160mil to RM204mil as the project's significant contribution would only commence from FY13 onwards.
“We would be disappointed if the project fell through as we thought it would give the group an opportunity to tap on to other parts of the River of Life project and enlarge its war chest of landbanks.”
Meanwhile, Leong pointed out that presently, Mah Sing had a remaining landbank of 1,070 acres with GDV of RM13bil.
“Together with unbilled sales of RM2.14bil, this should last us five to seven years. We will also be looking out for more good landbank in 2012 and are keen on both privately held land as well as government land that will be developed by the private sector, so that we can continue to enjoy longer term momentum and sustainable growth,” he added.
By The Star
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