No company would want to do a loss making business. This is true not just for private entities but even for Kuala Lumpur City Hall (DBKL). After all, if the deal is profitable, it helps DBKL to enhance its coffers or even allow it so save some expenses then why not? In a recent announcement to Bursa Malaysia on Sept 6, Ivory Properties announced that an agreement between its subsidiary Ivory Place Sdn Bhd and PRSB has been terminated as both parties could not come to an agreement. In a The Star report, DBKL said it has chosen a new company over Ivory Properties Group because it has got a more attractive deal for the abandoned project.
The new company issued a letter of intent is Profit Consortium Sdn Bhd and it is said that this new company will be building a ‘Sungai Wang Plaza’ kind of mall on the site. Apart from Profit Consortium, there was another party that has expressed interest in reviving the Plaza Rakyat project. Some of the advantages offered by Profit Consortium include the returns to DBKL not being pegged to the sales of the project and even the plot ratio remained without any revision. Profit Consortium is owned by Maxcorp Development Sdn Bhd, SW Land Sdn Bhd and Tan Sri Abdul Samad Alias. Maxcorp is the private vehicle of Major (Rtd) Anuar Adam while SW Land is the developer of Sungai Wang Plaza.
Long story cut short, Plaza Rakyat was abandoned since 1998 and put under receiver and manager AdamPrimus Chartered Accountants. A tender was called by AdamPrimus and Ivory Properties was chosen. The terms was, Ivory Properties would pay PRSB RM400 million and DBKL a maximum of RM560 million to take over the project. DBKL later filed for legal action, won and they did not recognise the tender by AdamPrimus or Ivory Properties who won. Thus, this case came to current situation where Ivory Properties’s deal is no longer recognised and Profit Consortium is now the new ‘white knight’.
I have no interest in whichever company chosen. However, I do wish that there are more transparency in terms of the deal being struck because this is after all a project which will benefit KL if it is successful and no one would want to see it being abandoned for another 10 years. Ivory properties also said something which I am not sure if it can be built but then again, this was no longer mentioned in the current deal. Read here: Potential 1,000 new PR1MA low cost homes cancelled, new plans? Let’s see what is the next announcement by DBKL on this huge project which was said to be RM8 billion by Ivory Properties few months ago.
written on 9th Sept 2014
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