Abandoned housing project to be sold for RM150m

KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) expects to sell an abandoned project it financed in Johor for about RM150 million this year.

"I can't reveal the exact location of the project as we are hoping to hold a tender for it," MBSB president and chief executive officer Datuk Ahmad Zaini Othman told reporters after its signing ceremony with property developer NCT United Development Sdn Bhd yesterday.

MBSB and NCT sealed a RM215 million financing facility to revive the country's largest abandoned housing project.

Ahmad Zaini said the company had received the necessary approval to go ahead with its plans.

When dealing with non-performing loans related to abandoned housing projects, MBSB has the option to either put in more money into the project to revive it, sell off the project to an interested party or go into a joint venture with a developer to develop the property.

MBSB's signing agreement with NCT is an example of extending more money into a project in the hope of recovering some of its initially bad loans.

It is also working on a solution for another one or two of its other abandoned housing projects.

MBSB hopes to reduce its non-performing loans (NPLs) by two to three per cent, closing at between 6.5 and 5.5 per cent this year. The company's net NPLs reduced from 18.9 per cent in 2009 to 8.5 in 2011.

Ahmad Zaini said the lower NPLs will be achieved through MBSB's ongoing loan recovery efforts and its increased focus in turning around loans related to abandoned housing projects.

By Business Times (by Presenna Nambiar)