KUALA LUMPUR (June 13): Ho Hup Construction Co Bhd and Zen Courts Sdn Bhd are in the process of appointing a valuer to determine the value of Zen Courts 30% stake in Bukit Jalil Development Sdn Bhd (BJD).
This comes after the High Courts decision earlier this year that Ho Hup, which already owns 70% of BJD, should buy out the remaining 30% stake in BJD held by Zen Courts at a price to be determined by an independent valuer.
Ho Hup executive director Derek Wong said the independent valuer is expected to be appointed within the next two weeks. "Both parties are in the process of confirming the valuer. We are advised that the valuation should not take more than two months," he said after Ho Hups AGM on Tuesday.
BJD holds the key to Ho Hups revival as it owns a 24ha piece of land in Bukit Jalil, which Ho Hup said could generate a total gross development value of RM4 billion.
However, Ho Hups purchase of Zen Courts stake in BJD does not resolve all the obstacles to developing the land, as there is still a separate, ongoing legal tussle between Ho Hup and Malton Bhd over a joint development agreement on the 24ha plot.
With the Ho Hup-Malton case now locked at the Federal Court level, Ho Hups regularisation plan to get itself out of PN17 status has to be revised.
Wong said Ho Hup is mulling options to finance the acquisition of the 30% stake of BJD from Zen Courts. "We are looking at the possibility of including it [acquisition of the 30% stake in BJD] as part of our revised regularisation plan. But ultimately it will depend on the judgment of the Federal Court. We want finality before we announce the plan," he said.
Wong said Ho Hup plans to apply to Bursa Malaysia to further extend the deadline to submit its revised proposed regularisation plan. The deadline for the submission is June 30.
"Our case is strong enough for another extension as we are waiting for the Federal Courts decision. We are advised by lawyers that the judgment could be announced three months from the grant of leave," he said. Ho Hup was given the grant of leave by the Federal Court in May this year.
Wong said Ho Hup is also looking to revive its construction business to expand its revenue stream.
"We are currently bidding for a few mid-sized jobs under the Economic Transformation Programme (ETP). We are also looking at possible joint ventures for property developments in the Klang Valley and Johor," said Wong.
He said its construction and property development businesses could be incorporated into Ho Hups revised regularisation plan.
"The management has decided that Ho Hup must have a contingency plan [and not to solely rely on the 24ha land]. We have a strong track record in the construction business and we still have the expertise within the group," said Wong.
Founded by Low Chee in the 1960s, Ho Hup was one of the countrys most prominent construction firms in the 1990s. It participated in the building of major projects such as the Petronas Twin Towers, National Sports Complex, and the Kuala Lumpur International Airport.
"As for finances for any construction job, we have the support of the shareholders. It would also be financed on a project basis," Wong said.
Categorised as a Practice Note 17 company, Ho Hups present regularisation plan is based on its rights to fully-develop the 24ha land via BJD. The regularisation plan was submitted after the High Court had in 2010 declared that a joint development agreement (JDA) entered into with Malton was null and void and ruled that Ho Hup has the full rights to develop the land.
However in December 2011, the Court of Appeal overturned the High Court decision and upheld the JDA. The case has since reached Federal Court, which granted leave to appeal in May this year. The case is pending hearing in the Federal Court.
This story appeared in The Edge Financial Daily on June 13, 2012.
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