JAKS dips 2.72% on filing injunction over bank guarantee to Star Media

KUALA LUMPUR (Feb 20): JAKS Resources Bhd fell 2.72% in active trade at mid-morning today after it filed an injunction in the High Court to restrain two financial institutions from releasing a RM50 million bank guarantee to Star Media Group Bhd in relation to an agreement for the purchase of a piece of land in Section 13, Petaling Jaya for RM135 million.

At 10.49am, JAKS fell 5 sen to RM1.79 with 1.93 million shares done.

Meanwhile, Star was flat at RM1.37, with 96,300 shares done.

The Edge Financial Daily this morning reported that the irrevocable and on-demand bank guarantee was made as security to ensure JAKS Island Circle Sdn Bhd (JIC) — a 51%-owned unit of JAKS — completes and delivers Tower A, a 15-storey office block, to be constructed on the land, within three years from the vacant possession date or the date of approval of the plans for the tower.

The RM50 million bank guarantee comprises guarantees of RM25 million each from two financial institutions. One guarantee expired on Feb 15, while the other will be expiring on April 15, unless an extension is granted.

JAKS said Star Media has informed the group it is not granting an extension for the bank guarantee. Instead, Star Media gave notice to the two issuing financial institutions on Feb 15 to call on the bank guarantee, which means JIC will have to pay the RM50 million sum to the issuers. — theedgemarkets.com

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