MRCB to pump in RM816.6m into MX-1

PETALING JAYA: Malaysian Resources Corp Bhd (MRCB) will pump in RM816.6 million as the lead partner in a 70:30 joint venture with the Employees Provident Fund Board (EPF) to develop Project MX1 in Sungai Buloh, Selangor, now expected to have a gross development value of RM8 billion.
MRCB and EPF's unit, Kwasa Land Sdn Bhd, will come together as development partners via a special purpose vehicle (SPV) company known as Kwasa Development (2) Sdn Bhd (KDSB).
MRCB and Kwasa Land yesterday signed a shareholders agreement for the project which will define the scope, terms and conditions of KDSB.
"The agreement will also see MRCB warranty a profit of RM2 billion to the SPV company in which MRCB has taken up a 70% stake at a subscription price of RM816.6 million while the remaining 30% stake is held by Kwasa Land," the statement said.
Following the completion of the proposed subscription, KDSB will own the MX -1 land spread over 64 acres and shall be the vehicle undertaking the project.
MRCB was selected as the development partner to develop the MX-1 land following a request for proposal exercise carried out by Kwasa Land to select a developer for the project.
As the successful tenderer, MRCB is required to subscribe 70% of the ordinary shares of RM1.00 each in KDSB.
In an announcement to Bursa Malaysia yesterday, MRCB said although the subscription payment was at a premium of RM53.6 million or 7% to the market value, it was of the view that it was reasonable given the prospects of Project MX-1 and the competitive bidding process involved.
As at July 18 2014, the land market value was RM1.09 billion, making MRCB's 70% interest worth RM763.0 million.
The proposed subscription is expected to be completed in the third quarter of 2015.
"With the signing of this agreement, we now have a clear path to the vision ahead for Kwasa Damansara. Our relationship as partners is now clearly laid out for us to proceed with work on this huge and exciting new township that will initially serve the living and working requirements of 135,000 residents," said MRCB's group managing director Tan Sri Mohamad Salim Fateh Din.
Mohamad Salim said that with a strong and highly capable partner like Kwasa Land, MRCB will be able to build on its expertise and experience to create a new dimension in lifestyle that will cater to the needs of both residential and commercial purchasers.
At the signing ceremony, MRCB was represented by chairman Tan Sri Azlan Zainol and Mohamad Salim while Kwasa Land was represented by chairman Tan Sri Samsudin Osman and managing director Mohd Lotfy Mohd Nor.
"We are indeed pleased to come together as joint development partners for Project MX-1, a main town centre and catalyst to the entire 2,330 acres in the proposed Kwasa Damansara, one which will create a thriving nucleus for a working and living population of 135,000 people,"Kwasa Land chairman Samsudin Osman said in a separate statement.
Kwasa Land has obtained an approval in principle for the master layout plan from the Majlis Bandaraya Shah Alam.
Full approval is expected before the end of the year with infrastructure work to kick-off by the first quarter of 2015.
Kwasa Land will be inviting Tier 3 Bumiputera developers for the inaugural bumiputra development by the third quarter of 2014.
Project MX-1 is an integrated residential and commercial development that will be the town centre of the proposed Kwasa Damansara Township.
MRCB and Kwasa Land intend to develop the MX-1 land into a residential and commercial hub of which 60% is designated for commercial use and the remaining 40% designated for residential use.