Oriental in project buy-back

PETALING JAYA: Oriental Pearl City Properties Sdn Bhd, a subsidiary of Malaysia Pacific Corp Bhd (MPCorp), will pay for the RM110.8mil buy-back of AmanahRaya Development Sdn Bhd's (ADSB) stake in a development project both parties had earlier agreed to via internal resources, loans or “other strategic investors.”

Ch’ng says any new investors will be decided by MPCorp without the restriction of seeking mutual consent from ADSB

ADSB has since exercised its rights to sell its investment in Johor's LakeHill Resort Development Sdn Bhd where it had a 22% stake, and Oriental, the remaining 78%.

MPCorp chief executive officer Datuk Bill Ch'ng told StarBiz that Oriental would purchase ADSB's stake and that the new investors, if any, would be decided by MPCorp, without the restriction of seeking mutual consent from ADSB.

In August 2008, a joint-venture agreement was entered into between ADSB and property firm MPCorp's wholly-owned Oriental whereby Oriental had granted a put option to ADSB to exercise its rights to sell its entire investment of 22% in LakeHill Resort Development to MPCorp on or before the expiry of the option period on Jan 31 this year.

The expiry date of the option period was then extended to Wednesday.

On Monday, the company said ADSB had given notice that it was exercising the put option granted to it and that Oriental was to purchase ADSB's participation in the joint-venture project.

The put option price of RM110.8mil shall be paid within a period of 60 days from March 26, the company told Bursa Malaysia.

It added that it was now at liberty and sole discretion to negotiate with other new strategic partner(s) of its choice.

No details were given as to why ADSB wanted to end the relationship.

StarBiz queries to ADSB were not answered by press time.

In explaining the termination of the relationship, Ch'ng said: “We understand Amanah Raya Bhd, of which ADSB is a subsidiary, is presently being transformed into holding the exclusive role of a trustee' company and shall no longer be involved in property development projects.”

The exercise of its option was both mutually satisfactory and friendly, he added.

LakeHill Resort Development, according to reports, is currently developing Aptec City on a 638-acre piece of land in Iskandar Malaysia under its wholly-owned unit, Asia Pacific Trade & Expo City Sdn Bhd.

Upon its completion in eight years' time, Aptec City will reportedly be MPCorp's jewel in the crown.

As at Dec 31, loss-making MP Corp had cash and cash equivalents of RM1.6mil. Notably, its total assets stood at RM511.1mil while liabilities totalled RM125.3mil.

By The Star