FBG seeks orderly exit from RM111.45m MediCity deal in Batu Kawan

PETALING JAYA (Aug 21): Construction and property development group FBG Holdings Bhd is seeking to cease its collaboration with Penang Development Corporation (PDC) for the proposed MediCity development in Batu Kawan, Penang.

In a Bursa Malaysia filing on Friday (Aug 21), FBG said its wholly-owned subsidiary FBG Land Sdn Bhd had written to PDC on the same day in relation to the master purchase and development agreement (PDA) entered into by the parties, proposing that they cease proceeding with the collaboration.

FBG said it is proposing that the parties discuss an orderly conclusion of the existing collaboration under the PDA.

FBG Land and PDC are currently in discussions over the proposed cessation. FBG said it will make further announcements when there are material developments or when the parties reach agreement on the terms and conditions of the cessation.

The announcement did not disclose why FBG is seeking to end the collaboration, the status of the proposed land acquisition, or the financial implications, if any, of the proposed cessation.

Proposed land acquisition

Under the master PDA signed on Jan 20, 2025, PDC agreed to sell and FBG Land agreed to purchase a 51.172-acre parcel in Bandar Cassia, Mukim 13, Batu Kawan, Seberang Perai Selatan, Penang, for RM111.45 million cash.

The proposed acquisition remained subject to the conditions precedent stipulated in the agreement. At the time of the original announcement, the land was vested in the Penang State Authority, with PDC to apply for its alienation, while individual title had yet to be issued.

The agreement provided for a deposit equivalent to 10% of the purchase price, payable upon execution of the master PDA. The deposit would be refundable if the conditions precedent were not fulfilled.

FBG’s latest filing does not state whether the deposit was paid, its current status, or whether any refund, compensation or other settlement forms part of the ongoing cessation discussions.

Wider MediCity plan

The 51.172-acre parcel formed the first phase of the proposed MediCity development, which was planned as a healthcare and wellness-led mixed development incorporating residential, retail and commercial components.

FBG had previously estimated that the development of the first parcel would have a gross development value of about RM2 billion over eight years. The wider MediCity development in Batu Kawan was planned to span about 235.8 acres.

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