Ireka subscribes for 30% stake in SPV undertaking Jln Kia Peng project

KUALA LUMPUR: Ireka Corporation Bhd is subscribing for a 30% stake in the enlarged capital of World Trade Frontier Sdn Bhd (WTF) to undertake the proposed development of a piece of property along Jalan Kia Peng here.

KUALA LUMPUR: Ireka Corporation Bhd is subscribing for a 30% stake in the enlarged capital of World Trade Frontier Sdn Bhd (WTF) to undertake the proposed development of a piece of property along Jalan Kia Peng here.

Ireka said on Thursday, Dec 31 that the other 70% would be subscribed by Aseana Properties Ltd’s unit ASPL M9 Ltd.

The proposed subscription is part of the agreement between Ireka and ASPL for the proposed residential property to be built on a 43,559 sq. ft. site along Jalan Kia Peng.

WTF is a special purpose vehicle (SPV), currently, owned by Ireka, to undertake the development.

To recap, on Dec 11, WTF had entered into a sale and purchase agreement with the vendors of the land, Kuok Chiu Hoon Selina, Kim Kuok Strickland and Farah Azman to acquire the site for RM87.12 million.

On the same day, Ireka had also signed an MoU with Aseana for the joint venture to own and develop the property.

The corporate development would see the paid-up of WTF increased from two shares of RM1 each to RM1 million comprising one million WTF shares. Ireka shall hold 300,000 WTF shares (or 30%) and shareholding) and ASPL 700,000 WTF shares (or 70%).

Ireka said the property contemplated in the proposed acquisition is located strategically in Kuala Lumpur city centre’s prime development area.  It added that in recent years, property development projects in the Kuala Lumpur city centre have received strong interest from both home owners and investors.

“Ireka believes the proposed acquisition is an excellent opportunity to invest and to participate in the development of the property in a proven location,” it said.

Ireka said the proposals allowed both parties to collaborate and jointly participate in the designing, developing, constructing, selling and manage a residential project to be built on the property.

It added Aseana has a track record of being involved in high-end property development projects in the major cities of Vietnam and Malaysia.

“The proposed JV will also enable Ireka to invest in a development project without burdening its balance sheet,” it said, adding this was in line with the Ireka’s overall plan to maintain an “asset light” strategy in terms of property development business, wherein resources which are usually required for property development projects are freed up and undertaken jointly with a separate entity.

This strategy has contributed positively to the ICB group in recent years, it added.