KUALA LUMPUR (Oct 11): PRG Holdings Bhd is set to develop its first affordable housing development in Ipoh, Perak with Syarikat Perumahan Negara Bhd (SPNB) once it has acquired the parcels of land there for the remaining sum of RM8.63 million.

The group’s wholly-owned subsidiary, Premier Construction Sdn Bhd (PCSB), entered into a mutual agreement (MA) with SPNB’s unit, SPNB Aspirasi Sdn Bhd (SASB), and Cash Key (Ipoh) Sdn Bhd (CKISB), the registered owner of the 213 parcels of land yesterday.

The land had initially cost a total of RM9.98 million, and SASB had already paid CKISB RM2.35 million based on a previous joint development agreement (JDA) between the two parties in February 2016.

The MA signed today saw the three parties agreeing to mutually terminate the JDA and for PCSB to pay the remainder of the land cost to CKISB, PRG said in a filing with Bursa Malaysia yesterday.

Under the previous agreement, CKISB had agreed to dispose of the land to SASB and subsequently complete the project as SASB’s contractor under the housing scheme known as “Cadangan Pembangunan Rumah Aspirasi Rakyat di Mukim Sungai Terap, Daerah Kinta, Perak.”

SASB has only made part payment for the land so far, although planning permission had been obtained and the building plans as well as earthworks and road and drainage plans had been approved for the project.

Under the new agreement, PCSB and SASB will form a joint venture company called Premier Aspirasi (Batu Gajah) Sdn Bhd for the development.

In the event that the land cannot be registered in favour of PCSB, however, the agreement will be terminated and PCSB will be fully refunded, the group said.

PRG group managing director Datuk Lua Choon Hann said in a statement today, that the project is in line with the group’s strategy of strengthening its presence in the property development market with strategic partners.

PCSB and SASB had in September signed a shareholders’ agreement to formally commit to the joint development of approximately RM5 billion worth of affordable housing projects.

Shares in PRG dropped one sen yesterday at RM1.02 apiece, giving the group a market capitalisation of RM307.34 million. — theedgemarkets.com

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