Nagamas and Silverland terminate Batu Gajah deal

KUALA LUMPUR: Nagamas Venture Sdn Bhd, a subsidiary of Nagamas International Bhd, has mutually terminated its project delivery agreement with Silverland Capital Sdn Bhd, according to a filing with Bursa Malaysia.

The agreement, entered into in June 2012 and expiring in November 2020, appointed Nagamas Venture to manage construction and non-construction aspects of the Silverlakes Development project in Batu Gajah, Perak.

“The development requires substantial capital commitment ... Given the current financial capacity of Nagamas, the company is not in a position to undertake the project at this point in time,” it said.

Nagamas said it has limited financing options available to undertake the large-scale development.

“The termination will allow Nagamas to explore and embark on other joint ventures in Klang Valley, which will provide for a faster project turnaround time and quicker return on investment,” it added.

Nagamas said the termination will not have any material effect on its earnings per share and net assets per share for the financial year ending Dec 31.

Nagamas announced in June 2012 that “the targeted gross development value (GDV) for all phases of the [207ha] development is RM1 billion”.

The agreement entitled Nagamas to 80% of the GDV as total contract sum.  Based on the successful targeted GDV of RM1 billion, the revenue to Nagamas was expected to be RM800 million.

The first phase, a lakeside resort with 111 individual villas and worth RM230 million in GDV, was launched in October last year.

This article first appeared in The Edge Financial Daily, on November 1, 2013.