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High Court rules for Ho Hup

KUALA LUMPUR: The High Court has ordered the application for stay of execution on the earlier judgment on the joint development agreement (JDA) on the 60-acre tract owned by Ho Hup Construction Co Bhd to be dimissed.

This implies that Ho Hup would have the sole right to develop the land in Bukit Jalil since the High Court had earlier declared the JDA between Pioneer Haven Sdn Bhd, controlled by Malton Bhd, and Bukit Jalil Development Sdn Bhd (BJD) as null.

BJD is a 70% owned unit of Ho Hup.

To recap, Pioneer Haven had applied for a stay of execution on the judgment.

In its announcement to Bursa Malaysia, Ho Hup said the High Court also set several conditions pending the disposal of Pioneer Haven's appeal to the court of appeal.

Ho Hup is not allowed to sell the tract and the company may "self-develop" the land but not form any joint venture for the development.

Also, Pioneer Haven's private caveat in respect of the land shall be removed

"The High Court's decision was indeed a good outcome for the company. Ho Hup can now focus on finalising its regularisation plan and submit it to the market regulator in two to three weeks," said Ho Hup executive director Derek Wong when contacted on Monday, June 20.

"We are now talking with our merchant banker to finalise the regularisation plan."

M&A Securities is the adviser for Ho Hup's regularisation plan.

Wong also noted that the company is in the process of refinancing the existing loan facilities granted by CIMB Bank Bhd and redeeming the charge in favour of CIMB over the land for the purpose of charging the tract as security to the new financier.

The company has been under PN17 status since July 2008, which requires it to submit a regularisation plan to Bursa Malaysia.

"Barring any unforeseen circumstances, we hope to get all the required approvals and get the company out of the PN17 status by the year-end," said Wong.

Ho Hup's share price moved up 3% or 2.5 sen to 84.5 sen on Monday.

In March, Ho Hup announced a regularisation plan that involved a proposed par value reduction of 50 sen, proposed rights issue and private placement with warrants, a creditors scheme and the acquisition of two property development companies from Plenitude Frontier Sdn Bhd.

The 60-acre plot of land in Bukit Jalil is considered Ho Hup's lifeline.

The land had a net book value of RM122.46 million, carried at a relatively low price of RM47 per sq ft.

Ho Hup's master plan for the land includes the development of shophouses, a shopping mall, apartments and high-rise office towers. Wong had earlier said the project would be launched in 4Q and be developed over the next 10 years. He said the land could produce a gross development value of RM4 billion to RM4.5 billion.

He added that the land has an approved nine million sq ft of net sellable area, with market prices of RM500 to RM600 psf.

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