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Sunsuria terminates JV with Taiwanese firm, to develop Salak Tinggi land on its own

KUALA LUMPUR (April 24): Sunsuria Bhd's subsidiary Sunsuria City Sdn Bhd (SCSB) has revoked the deal to sell a piece of land in Salak Tinggi, Putrajaya South to its 60%-owned joint venture (JV) company Sunsuria Everrich Sdn Bhd (SESB).

This is because SCSB's JV partner Welcome Global Co Ltd is unable to pay the remaining sum for the land purchase.

Sunsuria said the land sale price was RM36.94 million, and upon payment of the 10% or RM3.69 million deposit, the balance 90% was to be paid via two tranches. The first payment of RM7.39 million was to be paid within 12 months from the signing of the sale agreement on Nov 27, 2019, and the remaining payment of RM25.86 million was to be paid within 24 months from that date.

In a filing with Bursa Malaysia yesterday, Sunsuria said Welcome Global has informed the group that it was unable to contribute to the final payment due to the uncertainty in the global economy caused by Covid-19.

Following this, SCSB has taken over Welcome Global's shares in SESB and will develop the property on its own since the property is located within its development project at Sunsuria City, Sepang.

"Upon the disposal of SESB’s shares held by Welcome Global, Welcome Global shall cease to be a party to the shareholders agreement and the shareholders’ equity interest in SESB shall be adjusted accordingly,” said Sunsuria.

Sunsuria will then fully control SCSB via SESB and Sunsuria Gateway Sdn Bhd (SGSB), which will hold stakes of 95% and 5%, respectively.

Welcome Global is a wholly-owned subsidiary of Taiwan-based Ever Rich Land Co Ltd — a multinational company with construction and project development as one of its business activities.

The JV company had been set up to allow Sunsuria to unlock the value of the land, measuring 8.48 acres, into a mixed development project worth a gross development value of RM694 million. The development will comprise serviced apartments, retail shops, mall and boutique hotel and was slated to complete by 2023.

Sunsuria’s share price closed unchanged at 49 sen yesterday, valuing the group at RM439 million. The counter saw 17,000 shares traded.

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