Ho Hup and Malton settle out of court

PETALING JAYA: Ho Hup Construction Co Bhd and its 70%-owned Bukit Jalil Development Sdn Bhd (BJD) have agreed to discontinue their appeal to the Federal Court and have opted to settle out of court with Pioneer Haven Sdn Bhd, a subsidiary of property developer Malton Bhd.

Ho Hup was previously trying to invalidate the joint development agreement (JDA) signed between the two parties on 60 acres in Bukit Jalil.

In a statement issued to Bursa Malaysia, Ho Hup executive director Derek Wong said: “The board of directors is of the view that the amicable settlement reached through a variation of the original terms of the JDA was for the mutual interest and benefit for all parties.”

Ho Hup said the settlement comprised two key variations to the JDA, developed more than two years ago on March 16, 2010. Under the variations, the joint development would now be on 50 acres instead of the 60 acres agreed upon in the previous JDA. The other 10 acres would be developed solely by BJD.

Out of the 10 acres, 5.9 acres had been approved based on a plot ratio of 3.09 and would comprise an office tower and shop-offices. The remaining 4.1 acres were earmarked for highrise residential units.

BJD would also be entitled to 18% instead of 17% of the estimated gross development value, which was subject to a minimum of RM220mil.

In addition to that, Pioneer Haven have agreed to pay for and on behalf of BJD and Ho Hup towards the servicing of monthly interests and the redemption of the secured loan of RM75mil from Insas Credit & Leasing Sdn Bhd and the payments would be treated as an advance of part of BJD's entitlement. Pioneer Haven has also agreed to assist BJD in securing bank financing of up to RM20mil to develop BJD's land.

The company said Pioneer Haven would then be entitled to restrict the land as security for the refinancing and indebtedness to Insas Credit & Leasing Sdn Bhd as well as to partly finance the development cost of the joint-venture land.

Ho Hup executive director Derek Wong had said earlier that the company would focus on expanding its ready-mix concrete operations and reviving its construction arm. The company is in the midst of bidding for a few medium-size Economic Transformation Programme-related construction jobs.

He added that the company was looking at developing properties in the Klang Valley and Johor on a joint-venture basis.

By The Star