The parties agree to mutually terminate the deal after conditions precedent were not fulfilled
by ANIS HAZIM / Pic by BLOOMBERG
THE Bandar Malaysia development project appears to have stalled after the restated and amended share sale agreement (Rassa) for the sale of 60% shares in Bandar Malaysia Sdn Bhd (BMSB) to IWH-CREC Sdn Bhd (ICSB) lapsed on May 6, 2021.
According to a joint statement by the Ministry of Finance owned by TRX City Sdn Bhd and ICSB, the parties agreed to mutually terminate the share stake purchase after the conditions precedent in the agreement were not fulfilled within the condition precedent period and no extension was sought.
“TRX City and ICSB had been working together to find solutions to preserve the partnership to realise the common vision of unlocking Bandar Malaysia’s potential.
“Despite such efforts, to date, the parties have not been able to mutually agree to the terms of the extension of the condition precedent period. Thus, the agreement is now deemed null and void,” the statement yesterday read.
ICSB is a joint venture between Iskandar Waterfront Holdings Sdn Bhd (IWH) (60% stake) and China Railway Engineering Corp (M) Sdn Bhd (40%). BMSB is wholly owned by TRX City.
The Rassa was executed on Dec 17, 2019, and the 60% stake was to have cost ICSB RM7.4 billion. The consortium was required to pay a RM1.24 billion deposit for the proposed stake.
IWH has planned to sell a 40% stake in ICSB to Ekovest Bhd for RM1.5 billion to partly fund the project.
The Bandar Malaysia megaproject at the former Sungai Besi air base was mooted by the Barisan Nasional government to complement the proposed multibillion-ringgit high-speed rail project between Kuala Lumpur to Singapore.
Issues about financing and getting the correct developer had plagued its progress.
The then Pakatan Harapan government had agreed to restart the estimated RM140 million project with new conditions on local contractor participation and resource sourcing.
The HSR project was cancelled early this year after the Malaysian and Singapore governments were unable to reach an agreement on the changes proposed by Malaysia.
Previously, The Malaysian Reserve reported that property projects within Bandar Malaysia are likely to come under threat due to the cancellation of the HSR.