MPCorp in talks to redevelop Wisma MPL

KUALA LUMPUR (Jan 3) : Malaysia Pacific Corp Bhd (MPCorp) said it is negotiating with the 21st Metallurgical Development (M) Sdn Bhd (T21) for the redevelopment of Wisma MPL in Jalan Raja Chulan here.

“T21 and the company have agreed to incorporate a joint-venture (JV) company to acquire the company’s shop lot and office units in Wisma MPL,” it said in a filing with Bursa Malaysia yesterday.

MPCorp said it and T21 intend to subscribe for shares in the JV company and to regulate their rights as shareholders in accordance with the JV agreement’s terms and conditions. “The negotiation is currently in the final stage and the final JV agreement has been served to T21 for its execution,” it added.

Wisma MPL is one of MPCorp’s two core assets, besides the 490-acre (198ha) tract it owns in Johor. Completed in 1973, it was known as Wisma MPI and then Wisma HLA, and Wisma MPL thereafter.

Last month, MPCorp announced that the second auction obtained by creditor RHB Bank Bhd on July 10 was called off as there was no bidder. It added that RHB Bank, on Nov 2, filed a fresh application for auction.

It was reported the loss-making property outfit had first announced its intention to sell the 23-storey office-cum-shopping building in November 2013, valued at RM320 million back then, to scrounge up cash to meet its obligation following the default on repayment of banking facilities provided by RHB Bank.

Adding to its troubles, the group was designated a Practice Note 17 status in December 2014 after its external auditor Messrs UHY expressed a disclaimer opinion on its audited accounts for the financial year ended June 30, 2014 (FY14), and subsequently for FY15 and FY16 as well.

In July last year, MPCorp entered into a memorandum of understanding with Singapore-based Terra Pontus Pte Ltd for the sale of a part of Wisma MPL for RM250 million, after the group sold some of the units in the complex.

However, the sale was aborted in September, after not receiving any earnest deposit from the purchaser.

Zitron (M) Sdn Bhd also expressed interest in the property last year and even paid an earnest deposit of RM5 million, before backing out of the deal.

In August 2016, the Kuala Lumpur High Court made an order for sale of the property and fixed Nov 21, 2016 as the auction date for Wisma MPL.

MPCorp shares closed unchanged at 11 sen yesterday, with a market capitalisation of RM31.64 million.

This article first appeared in The Edge Financial Daily, on Jan 3, 2018.

For more stories, download EdgeProp.my pullout here for free.