One of Malaysia’s largest developers, Mah Sing has announced that it has cancelled its purchase for a piece of freehold land in Seremban. It has sent a letter to the vendors seeking for the refund of the 10% deposit paid earlier as the purchase consideration. It said that, “The SPA is void and/or rescinded, due to, amongst others, misrepresentation and/or the breach of terms and conditions of the agreement by the vendors and/or events that are unlawful have occurred.” It was to have been a project with a gross development value of RM7.5 billion. The land size is 960 acres and the price offered was RM359.55 million.
Just one week earlier, in a filing with Bursa Malaysia, Mah Sing had announced that its unit, Grand Prestige had been served with a writ and statement of claim made in the Seremban High Court. Seven people claimed that they were the undivided registered proprietors/beneficial owners to the land and thus they were seeking a declaration that the agreement to sell and acquire the land is invalid, among others. These legal tussles would usually take a long time and I think for a developer it may be best to step back and look at other opportunities instead. There’s nothing to stop it coming back to the negotiation table in the future when the caveat on the land has been lifted.
With this cancellation, I think we can expect Mah Sing to announce their next purchase in the near future. This is because it had already raised RM629.32 million from its rights issue with warrants. Yes, I own 1,000 units and I have also received the warrants. Haha. It was just a buy for me to keep up with Mah Sing’s progress. Money raised without any use meant little to developers. It said that this would not materially affect its business because the development of its existing landbanks would mitigate this ‘loss’ in potential new development. Besides, it may be acquiring new lands in the future. Happy reading.
written on 14 aug 2015
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