EcoFirst’s acquisition of Ulu Klang land further delayed on technical issues

GEORGE TOWN (Aug 4): EcoFirst Consolidated Bhd’s purchase of 62-acre (24.8ha) piece of land worth RM145 million in Ulu Klang, Gombak in Selangor has been further delayed due to technical issues on land alignment.

According to the group, Zurich Insurance Malaysia Bhd have mutually agreed to extend the purchase completion of the land, which fronts Middle Ring Road 2 (MRR2), for a further three months to Oct 31, 2015 due to the said reasons.

In the filing to Bursa Malaysia yesterday, EcoFirst chief executive officer Datuk Tiong Kwing Hee said the group is awaiting all pending relevant information from relevant authorities to finalise the full payment of the acquisition.

“EcoFirst has stated that the extension of full payment of the balance purchase consideration is due to further clarification and information from the relevant authorities pertaining to land acquisition and alignment arising from the development of Sungai Besi-Ulu Kelang Elevated Expressway connecting to the MRR2," said Tiong.

The conditional SPA was signed on Dec 31, 2013.

Based on exchanges of letters dated July 31 and Aug 3, 2015, EcoFirst said both parties had agreed in principle to the extension for the group to pay the balance purchase consideration of RM130.5 million with late payment interest at a rate of 6% per year on or before Oct 31, 2015.

In the filing, EcoFirst said it will provide Zurich Insurance Malaysia monthly updates on the progress of the completion of the sale and purchase agreement (SPA) from itself and the financier.

“For avoidance of doubt, the SPA is only completed when the balance purchase consideration and all late payment interests are paid,” it said.

Tiong said the planned elevated highway will positively impact certain parts of the land that fronts the Ulu Kelang portion of the MRR2.

“This would in turn affect EcoFirst’s proposed development plans for which the board of directors and the management will take appropriate steps and make necessary changes,” Tiong explained.

“Once this land is acquired, it will be the jewel in EcoFirst’s crown, as it is one of the few large parcels left in the Klang Valley.

“With our plans for this land, our property development division can be expected to contribute positive earnings over the medium to long term,” he added.