KUALA LUMPUR (July 29): Mah Sing Group Bhd ( Financial Dashboard) announced today that the group, together with the owner of a prime leasehold tract in Puchong measuring 88.7 acres, have mutually agreed to give Mah Sing until Aug 26 for it to decide if it will proceed with or cancel its RM656.9m acquisition of the said land.
Mah Sing had previously announced in August last year that the proposed acquisition — initially expected to be completed in the second half of this year — was for a mixed-use development for which it had estimated would carry a gross development value (GDV) of RM9.3 billion.
Under the sale and purchase agreement (SPA) with the landowner Huges Development Sdn Bhd last year, Mah Sing's wholly owned unit MS Lake City Sdn Bhd was supposed to confirm this month whether it would proceed with or rescind the SPA, which has now been extended to Aug 26.
"Should MS Lakecity decide to proceed with the SPA by confirming in writing on or before Aug 26, the BPP 1 (30% of the purchase consideration or RM197.07 million) shall be paid on Aug 27 instead of the earlier agreed date of Aug 28," it said in its filing with Bursa Malaysia on July 28.
However, Mah Sing said if the SPA is rescinded, all balance monies paid by MS Lakecity to the vendor — after deducting 1% of the purchase consideration or RM6.56 million as commitment fee and agreed liquidated damages — will be returned to MS Lakecity free of interest within 60 days (as opposed to within 30 days in the SPA) from the receipt of the notice of rescission.
It had earlier paid RM65.69 million or 10% of the purchase consideration on signing the SPA.
Meanwhile, Mah Sing had previously announced that the acquisition would increase the group's GDV and unbilled sales by approximately 23% to RM50 billion and bring about earnings visibility for the next eight to 10 years.
"The project has an estimated GDV of RM9.3 billion. Mah Sing has proposed to acquire the 88.7-acre (35.9ha) tract in Puchong for RM656.9 million or RM170 per sq ft (psf) from Huges Development Sdn Bhd," according to its earlier filing.
Mah Sing was granted a four-year deferred term on the purchase, whereby 10% of the consideration will be paid upon the signing of the agreement, with the balance 90% stretched over 48 months.
Mah Sing said it plans to develop serviced residences, office towers, shop offices, retail lots, a retail mall and a hotel on the land.
The development of the project, work on which was expected to begin this year, would stretch over a period of 10 years.
Mah Sing had also said then that the units would cater to the mass market and medium- to high-income households, and that the prices of the serviced residences would start from RM585,000.
Mah Sing closed down three sen or 2% at RM1.47 yesterday for a market capitalisation of RM3.61 billion.