KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) will finance the builder and buyers of Malaysia’s biggest abandoned housing project, located in Bandar Baru Salak Tinggi, Sepang as part of its efforts to resolve its corporate legacy accounts issue.
MBSB, which is 65.5%-owned by the Employees Provident Fund (EPF), will provide term and bridging finance facilities of up to RM215mil to builder NCT United Development Sdn Bhd (NCT), and an additional RM243mil to the buyers, said MBSB CEO Datuk Ahmad Zaini Othman.
“When the new management (of MBSB) came in in 2009, we wanted to find a way on how we can resolve these legacy problems.
“And one of the ways is to support this project through NCT to revive the project.
“This project have been unresolved for more than 10 years,” Ahmad Zaini said.
“We foresee they’re (the buyers) are going to face problems to secure financing from the banks.
“So we are also putting up another package which is the end financing package to support purchasers.
“We are shifting the corporate risk from NCT to the purchasers,” he added.
Buyers will pay an interest rate of base financing rate minus 0.5%, which is slightly more expensive compared with conventional loans because these borrowers are mostly in their 50s, according to MBSB.
MBSB is also classified as an ‘exempt finance company’ and is thus not bounded by any financial regulators in Malaysia.
“It is only fair and just to do so as they (these borrowers) have honoured their initial obligations but failed to receive their end of the bargain,” Ahmad Zaini said.
After discussions with the purchasers, an agreement was reached to divide them into two classes.
According to NCT, one class of buyers who wish to continue with the purchase will have to top up another 30% to the original purchase price of either RM140,000 (for 20X70) or RM97,000 (for 18x60) units.
These units have seen a price appreciation of about 80% since it was abandoned.
The second group of buyers can get a full refund for their units as construction of their units was minimum.
“This is a big step for us.
“Hopefully it will be a win-win situation for all,” Ahmad Zaini said at the signing ceremony here yesterday, adding that there were two more such abandoned legacy projects that were scheduled to be revived.
“NPL (non performing loans) will not go away unless and until you revive the project,” he said, adding that MBSB’s net NPL stood at 8.5% as at December 2011.
The project, named Taman Kenanga, was abandoned in 1999.
The developer, Kumpulan Sepang Utama Sdn Bhd (KSUSB), is currently in liquidation.
The signing ceremony of the agreement yesteday involved three parties - MBSB, NCT and KSUSB’s liquidators, GTC Corporate Advisory Sdn Bhd.
According to MBSB, the housing project was abandoned due to cost overruns coupled with the “unfavourable economic situation then”.
It will be renamed Sepang Perdana and is expected to be completed within two years, said NCT CEO Zulfikri Saidin.
The project was initially earmarked to have 2,536 units of commercial, linked houses and low cost houses on 110 acres.
By The Star
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