News: Deadline For IWH-CREC To Settle Outstanding Deposit For Bandar Malaysia Stake Extended

Jul 23, 2020

Due to the Covid-19 outbreak, TRX City Sdn Bhd has extended the deadline for IWH-CREC Sdn Bhd to settle its RM1.1 billion outstanding upfront deposit for its purchase of a 60% stake within the Bandar Malaysia project.

Finance Minister Tengku Datuk Seri Zafrul Aziz said the deadline was extended by four-and-a-half months – or from 30 April to 15 September, reported The Edge Markets.

In a written reply to a parliament question on the status of the payment, Tengku Zafrul said IWH-CREC has paid TRX City RM148.2 million or 2% of the RM6.45 billion net proceeds from the equity stake sale so far.

Read our honest review on Bandar Malaysia here!

“The balance of the sale proceeds will be received in stages up until 2023,” said the minister as quoted by The Edge Markets.

A fully-owned unit of the Minister of Finance Inc, TRX City is the parent company of Bandar Malaysia Sdn Bhd (BMSB), which in turn is the master developer of the 197ha Bandar Malaysia development in Jalan Sungai Besi.

On 17 December 2019, TRX City sold 60% stake in BMSB for RM7.41 billion to IWH-CREC.

At the signing of a restated shared and amended share sale agreement as well as shareholder agreement, then-finance minister Lim Guan Eng reportedly revealed that the revived deal involved a bigger RM1.24 billion advance payment from IWH-CREC, which comprised RM741 million deposit and an additional RM500 million.

The RM7.41 billion purchase price includes the commitment from IWH-CREC to take up a 60% obligation on the sukuk, amounting to RM1.6 billion, issued by Bandar Malaysia.

IWH-CREC is a joint venture between Iskandar Waterfront Holdings Sdn BHd (IWH) as well as China Railway Engineering Corp (M) Sdn Bhd (CREC). IWH holds a 60% stake in the JV, with the remaining 40% stake owned by CREC.

Tycoon Tan Sri Lim Kang Hoo owns a 63% stake in IWH. The remaining 37% is held by Johor state government’s Kumpulan Prasarana Rakyat Johor Sdn Bhd.

 

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Catherine Wong
Real Estate Negotiator
REN: 23091
KITH AND KIN REALTY SDN BHD
catherine@kithandkinrealty.com
(+60) 19-6633377