IJM Corp’s RM1.2b development project in Penang shelved

KUALA LUMPUR (Aug 9): A plan by IJM Corp Bhd for a RM1.2 billion development project in Penang’s Seberang Perai Tengah has fallen through following the termination of a conditional share sale agreement to acquire Giant Hectares Sdn Bhd, whose acquisition was to pave way for the project.

IJM Corp said in an exchange filing yesterday that its wholly-owned unit IJM Land Bhd and Aseania Development Sdn Bhd have mutually agreed to terminate the conditional share sale agreement signed in July 2017.

“The termination was due to the non-fulfilment of the condition precedent to the share sale agreement till to-date,” IJM Corp said in an exchange filing yesterday, adding the termination would not cause any significant impact on the group’s earnings or net assets per share for the financial year ending March 31, 2019.

In July 2017, IJM Land signed a conditional share sale agreement with Aseania Development to acquire all 250,000 shares in Giant Hectares owned by it for RM250,000 cash.

Giant Hectares in January 2015 executed a sale and purchase agreement to acquire four pieces of vacant commercial land in Seberang Perai Tengah, Penang for RM125.04 million. The acquisition was subject to the fulfilment of certain conditions precedent such as the approval of the Economic Planning Unit.

The parcels of land, measuring a total of 148,934 sq m, were initially intended for a development project with an estimated gross development value of RM1.2 billion, according to an IJM Corp filing last year.

IJM Corp shares yesterday rose two sen or 1.01% to RM1.99 with a market capitalisation of RM7.23 billion. Some six million shares were traded.

Over the past three months, the stock has lost approximately 23% of its value.

This article first appeared in The Edge Financial Daily, on Aug 9, 2018.

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