'Air Itam and Pulau Indah land attracts interest'

01 Jul 2015 / 05:36 H.

    PETALING JAYA: 1Malaysia Development Bhd (1MDB), which has embarked on a debt rationalisation process, has received significant expressions of interest for its land in Selangor and Penang.
    This follows an announcement on Feb 18 of its intention to monetise the company's land parcels in Air Itam and Pulau Indah through joint ventures or outright sales.
    "I am pleased to update that we have received significant expressions of interest in both land parcels," 1MDB's president and chief executive Arul Kanda Kandasamy said in a statement yesterday.
    Arul Kanda added that the company will appoint an independent real estate consultant to review the proposals and will provide an update of the development in the next two weeks.
    1MDB bought a 310-acre land in Pulau Indah from Tadmax Resources Bhd for RM317.3 million, or RM23.50 per sq ft in Feb 2014.
    However, in Dec 2014, both parties entered into a supplemental share sale agreement that saw 1MDB getting hold of the land for RM294.37 million or RM21.80 per sq ft, a 7.2% discount from the original RM317.34 million that was agreed upon in a share sale agreement late February last year.
    The Pulau Indah land was the first plot of land that 1MDB acquired from the private sector, given that it had earlier obtained two strategically-located plots in the area via direct negotiations with the government.
    The leasehold land is located within a larger plot measuring 381 acres adjoining the controversial Port Klang Free Zone (PKFZ) mega transhipment hub.
    Meanwhile, in an announcement yesterday, Tadmax Resources clarified that the valuation of Pulau Indah land sold to 1MDB was not subject to approval by the Securities Commission (SC).
    "Tadmax wishes to clarify that the valuation of land in connection with the company's sale of its Pulau Indah land in Selangor to Ivory Merge Sdn Bhd (IMSB) was not subject to the approval of the Property Valuation Department of the SC," it told Bursa Malaysia.
    The announcement was made in reference to news reports by The Malaysian Insider, The Edge and MalaysiaKini, quoting Tadmax's previous statement on June 24, that the sale price of the Pulau Indah land at RM21.80 per sq ft was supported by a valuation carried out by an independent valuer, Azmi & Co, and subjected to approval by the Valuation Department of the SC.
    As for the Air Itam land, 1MDB forked out RM1.38 billion to buy 234 acres of the freehold land which was transacted into two deals on April 29, 2013, just six days before the May 5, 2013 general election with a third and final deal on Sept 23, 2013.
    It was alleged that the purchase price of RM1.38 billion was 95% higher than what part of the parcels of the land was valued for just two years earlier in December 2011.
    In a pre-election political pledge to the people of Penang, the federal government had announced plans to build 2,222 low-medium cost houses and 1,111 affordable houses in Penang, including at Air Itam, which did not materialise with its failure to wrest back Penang from the opposition.
    Yesterday, 1MDB said the monetisation of the Air Itam and Pulau Indah land are part of its plans to pare down its debt totalling RM42 billion.
    Recently it made a request for proposal (RFP) to seek development partners for the 486-acre Bandar Malaysia project in Sungai Besi and is actively pursuing various options with respect to the monetisation of Edra Energy which it said has received significant interest from potential investors in both Malaysia and abroad.
    In a separate statement also released yesterday, 1MDB said it would be able to reduce its debt by RM16 billion when it completes the commercial negotiations with Abu Dhabi's International Petroleum Investment Co (IPIC).
    "Combined, these actions will allow us to reduce 1MDB's debt significantly, and ensure that maximum value is generated for the 100% ultimate shareholder, the Government of Malaysia," it said.
    1MDB made two separate statements yesterday reiterating their position on continued criticism from opposition party member of parliament Tony Pua and former premier Tun Dr Mahathir Mohammed.


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