Open for Business

Bandar Malaysia redevelopment project of the former RMAF Kuala Lumpur Air Base in Sg. Besi is open for business from fresh parcel bidders now the IWH-CREC consortium unable to make good it’s Share-Sale Agreement (SSA) terms.

Press Release

For Immediate Release

BANDAR MALAYSIA AGREEMENT WITH IWH CREC LAPSES

KUALA LUMPUR, 3 May 2017

1. TRX City Sdn Bhd would like to announce that the Share Sale Agreement (SSA) entered into on 31 December 2015 with Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corperation (M) Sdn Bhd (CREC) – who on 21 July 2016 assigned its benefits and responsibilities to IWH CREC Sdn Bhd – regarding the sale of 60% of the issued and paid-up capital of Bandar Malaysia Sdn Bhd, has lapsed.

2. This is because, despite repeated extensions being granted, IWH CREC failed to meet the payment obligations outlined in the Conditions Precedent under the SSA. As a result, the share sale agreement between the parties stands null and void with immediate effect.

3. Looking ahead, given a significant appreciation in the value of the Bandar Malaysia land, TRX City’s sole shareholder the Ministry of Finance will now be retaining 100% ownership of the site to ensure that the Malaysian people benefit from its development in its entirety.

4. TRX City will immediately be inviting expressions of interest for the role of master developer of Bandar Malaysia, with full ownership being preserved by the Ministry of Finance. The selection process will involve very strict criteria, including track record, speed of delivery and financial capability for such large scale development. This is to enhance all aspects of Bandar Malaysia, including its role as a business, transport, residential and tourism hub.

5. The steps taken today will ensure that there is no detrimental impact on the long-term development of Bandar Malaysia and that, upon its completion, the site will serve the national interest to an even greater extent than before.

6. Bandar Malaysia will be a catalyst for economic growth and national development. The biggest development site in Malaysia in a key strategic position, it will offer many business, investment and employment opportunities, including Kuala Lumpur Internet City, the hub for the new Digital Free Trade Zone. It will also be Malaysia’s transport nucleus, connecting the Kuala Lumpur-Singapore high-speed rail, MRT lines, KTM Komuter, Express Rail Link and 12 highways.

Ends

Please contact Maisara Ismail at maisara.ismail@trx.my for any media enquiries.

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Ministry of Finance Inc. (MOF) decision to undertake the master development role of Bandar Malaysia, which also has been earmarked as the Transportation Hub.

The Star story:

Friday, 27 January 2017 | MYT 7:04 PM

MRCB signs new MoU to develop Bandar Malaysia transport hub

BY M. HAFIDZ MAHPAR

image: http://www.thestar.com.my/~/media/online/2017/01/27/11/10/dcx_doc6qfv7paw70813o3kpdtk.ashx/?w=620&h=413&crop=1&hash=513167BA9D3AD037BBABA6934F5EC18F92BDBF64

MRCB is a pioneer in transit oriented development in Malaysia through its Kuala Lumpur Sentral CBD project.

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) has inked another memorandum of understanding (MoU) to develop an integrated transportation terminal at Bandar Malaysia, Kuala Lumpur.

Wondrous Vista Development Bhd continues to be a joint signatory, but the third partner now is Bandar Malaysia Sdn Bhd.

Under the original MoU to develop the hub, IWH CREC Sdn Bhd — a joint venture between Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Group Ltd — was the third partner.

The original MoU, signed in June last year, has lapsed.

The latest non-binding MoU, which was signed on Jan 3, would also have a validity period of six months, MRCB said in a filing with Bursa Malaysia. The agreement, however, may be terminated at any time by mutual consent.

Bandar Malaysia Sdn Bhd is the 100% shareholder of Omega Cartel Sdn Bhd, which in turn is the registered owner of the 486 acres of land at Bandar Malaysia.

Under the agreement signed in June last year, Minister of Finance Inc would own 40% in Bandar Malaysia Sdn Bhd and the rest by IWH CREC Sdn Bhd. It is not known whether the shareholding structure remains.

MRCB said 60 acres had been earmarked for the purpose of an integrated transportation terminal.

Read more at http://www.thestar.com.my/business/business-news/2017/01/27/mrcb-signs-new-mou-to-develop-bandar-malaysia-transport-hub/#fk39h7MKWQbrUElC.99

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Federal Government also announced the setting up of Asset Co., the asset management co. to undertake the high speed rail project.

The Star story:

Wednesday, 3 May 2017 | MYT 2:23 PM

Tender for KL-Singapore high speed rail asset firm by year end

KUALA LUMPUR: The government will call for a tender by the year-end to set up a privately-financed asset company (AssetsCo) for the Kuala Lumpur-Singapore High Speed Rail project, said MyHSR Corporation Sdn Bhd chief executive officer Mohd Nur Ismal Mohamed Kamal.

AssetsCo will be responsible for the design, build, finance and maintain rolling stock and to design, build, finance, operate and maintain rail assets such as track-work, power, signalling and telecommunications.

“We are transitioning from the development phase to the implementation phase where we have hired our civil reference designers and consultant adviser for the system site (railway system) jointly with Singapore.

“We are working hard towards the procurement stage, which will be the start of the construction phase, and for Assetco, we are targeting by end of this year,” he told reporters on the sidelines of the “Third High-Speed Rail Symposium in Malaysia” here on Wednesday. – Bernama

Read more at http://www.thestar.com.my/business/business-news/2017/05/03/tender-for-kl-singapore-high-speed-rail-asset-firm-by-year-end/#yyMjzxPr9fegVEYL.99

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Bandar Malaysia would also be the site for the Terminal of the Kuala Lumpur Singapore high speed train, which first tranche of the series of tenders would be opened by end of the year.

The Edge Market story:

First tender for KL-Singapore high-speed rail assets up in 4Q17

^–A⁺A

KUALA LUMPUR (May 3): The first tender for the KL-Singapore high-speed rail (HSR) project will be called in the final quarter of 2017 for the purpose of setting up an assets company (AssetsCo), said Land Public Transport Commission (Spad) chairman Tan Sri Syed Hamid Albar.

He said it would be followed by infrastructure tenders in the first quarter of 2018.

“We have completed the initial process of appointing a joint development partner and a reference consultant (earlier this year). So the next stage is the calling of tender by the AssetsCo [at the] end of the year. It is interesting to note that we have a lot of international interest to bid for the infrastructure tenders,” he told reporters on the sidelines of the third HSR Symposium in Malaysia.

The symposium was organised by the Japanese government to share its 52 years of experience in its HSR, also known as the Shinkansen.

The 350-km HSR will connect Bandar Malaysia in Kuala Lumpur and Singapore. Both the Malaysian and Singaporean governments signed a bilateral agreement to build the rail that is expected to be completed by 2026.

Last July, the respective governments signed a memorandum of understanding to establish the HSR and appoint the AssetsCo to provide and maintain the HSR trains and its associated systems, such as track, power, signalling and telecommunications.

As for the operation of cross-border services, both MyHSR Corp Sdn Bhd, a MoF Inc subsidiary, and Singapore’s Land Transport Authority would be appointed to operate the HSR services.

Asked about the project cost, Syed Hamid said it was too early to disclose while the governments would decide on the best bidder based on its financial package.

“We will look at the most attractive package at best price and something both governments can afford and accept. It is still at early stage now but we will come up with the total cost later,” he said.

He added that each project would need to be done according to budget allocation as the government has a budget cap while the rest is taken on by the companies.

In addition, he noted that foreign bidders are required to ensure a 40% Bumiputera content so that local businesses can also benefit.

Meanwhile, Syed Hamid said the fare pricing for the HSR would not depend on ridership so as to avoid astronomical ticket costs but it would be supported by transit-oriented development (TOD).

“Even in Japan, a bulk of its revenue comes from TOD. Only China can sustain on fare revenue because of high ridership,” he said.

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This is a golden opportunity for MOF Inc. to realise better value from fresh bidders for the Bandar Malaysia, as oppose to the initial value of RM12.35 billion as at 31 Dec 2015 as per announcement of master development consortium IWH-CREC.

Two years ago MOF decided to hive off majority control of the Bandar Malaysia to master developer consortium IWH-CREC.

This development is a followthrough of the 1MDB Rationalisation Plan since the Federal Government strategic investment corporation is no longer pressed to resolve its financial woes, unlike two years ago.

The Star story:

Thursday, 31 December 2015 | MYT 10:04 AM

1MDB to sell 60% stake in Bandar Malaysia for RM7.41bil

BY RAZAK AHMAD

KUALA LUMPUR: 1Malaysia Development Berhad (1MDB) will sign a share sale and purchase agreement to sell 60% of its equity in Bandar Malaysia Sdn Bhd to a consortium for RM7.41bil, the final milestone in its rationalisation plan.

The buyer, a consortium known as IWH-CREC Sdn Bhd, is a 60:40 joint venture between Iskandar Waterfront Holding Sdn Bhd (IWH) and China Railway Engineering Corporation.

A press release issued by 1MDB before the start of the ceremony this morning said that the agreement marked the final milestone in the 1MDB rationalisation plan as presented to the Cabinet on May 29.

The agreement follows from the execution of the Binding Term Sheet with IPIC in June 2015 and the Share Sale and Purchase Agreement with CGN Group last month.

The statement said that the IWH-CREC Consortium has valued the Bandar Malaysia land situated in Sungai Besi at RM12.35bil.

“Accordingly, its 60% share will cost RM7.41bil. 1MDB will receive a 10% deposit of RM741mil upon execution of the Share Sale and Purchase Agreement, with completion of the transaction expected by end June 2016.”

Read more at http://www.thestar.com.my/news/nation/2015/12/31/1mdb-to-sell-stake-in-bandar-malaysia-for-7_41bil/#GUfSY1iITKZgwG2z.99

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Iskandar Waterfront Holdings (IWH) is a Johor based property development corporation, controlled by property and construction tycoon Tan Sri Lim King Hoo. Khazanah Holdings Bhd. is a minority shareholder of IWH.

Earlier, IWH was illustrated to be a bullish corporation which is ready to be listed back on Bursa Malaysia.

Borneo Post story:

Analysts positive on IWH, sees ‘superb future earnings potential’

May 3, 2017, Wednesday Yvonne Tuah, yvonnetuah@theborneopost.com

KUCHING: The proposed merging of Iskandar Waterfront Holdings Sdn Bhd (IWH) and Iskandar Waterfront City Bhd (IWC), of which IWH will resume the listing status of IWC (post exercise), met with positive views from analysts.

They pointed out that this move could create a new breed of developers in town, which focuses on land sales.

In a report, the research arm of Kenanga Investment Bank Bhd foresaw that IWH may have great earnings potential given that they have identified buyers for circa 150 acres of Bandar Malaysia.

“Assuming an average selling price of RM2,000 per square feet (psf), the potential land sale of circa 150 acres of land would contribute c.RM2.5 billion to its bottom-line or RM0.8 billion per annum over three years, allowing IWH to convert its redeemable convertible preference shares (RCPS) as it would have then achieved a cumulative profit after tax of RM1 billion.”

To recap, IWC has entered into a land sale agreement with Greenland, China back in 2015 for the disposal of three parcels of land in Johor (127.9 acres) for total consideration of RM2.4 billion which could potentially generate profit after tax (PAT) of RM1.2 billion which is to be recognised over three years.

“However, this particular deal has yet to be completed as they have received further extension till May 5, 2017,” the research team added.

“Assuming that every party agrees to inject their land into IWH, IWH would effectively own 7,367 acres of prime land in Johor as most of these lands are located within prime areas, which are Danga Bay, Plentong, and Johor central business district (CBD).

“Citing its press release, its Johor lands have a total open market value (OMV) of circa RM30 billion that is assessed by independent valuers for its 7,367 acres of prime land-bank in Johor, which implies an average market price of RM93.5psf,” it estimated.

As for its Bandar Malaysia land (486 acres) with an effective stake of 36 per cent, Kenanga Research noted that it would only be injected into IWH after the land gazette is lifted.

“Based on an illustrative selling price of RM2,000 psf, Bandar Malaysia alone would carry a total market value of RM42. billion and at 36 per cent stake, this will add another RM15.2 billion to its Johor land market value of RM30 billion.

“This implies a combined market value of RM45.2 billion for its land, which management intends to monetise through land sales in the future.”

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China Railway Engineering Corporation (CREC) is the group with the largest construction market in China. Annual turnover is in excess of USD105 billion.

The strengthening of the Ringgit against US Dollars is also a plus point for the realisation of Bandar Malaysia.

The recent announcement at London Stock Exchange on the amicable resolution reached between 1MDB and IPIC also should pave for better financing options for TRX City as the master developer.

If the initial indicative value for Bandar Malaysia now should be at an addendum premium of 10% after two years, the sum would stand in the neighbourhood of RM13.5 billion.

Just taking the same formula, MOF is able to realise value of Bandar Malaysia at RM5.4 billion . If the premium is double, then the value is in the neighbourhood of RM15 billion.

According the Borneo Post story, the illustrative GDV for the whole 486 acres of Bandar Malaysia development stood at the neighbourhood of RM42 billion when fully realised.

If this is the illustrative for MOF Inc. the realise the GDV for incoming parcel developers, then entire development eventually realise healthy proceeds for the Federal Government coffer.

Despite when IWH-CREC the master developer for Bandar Malaysia, the Malaysian interest stood at 64% (MOF Inc 40%, IWH 24%), the question of “Selling Malaysian sovereignty to China” no longer arise now as TRX City is 100% owned by MOF Inc.

Hence, Bandar Malaysia is not only open for business, it is Malaysian business.

*Updated 2359hrs

Master developer of Bandar Malaysia IWH-CREC reacted adversely with TRX City announcement.

The Edge Market story:

IWH CREC disputes TRX City’s claims over lapsed Bandar Malaysia stake sale deal

May 03, 2017 21:09 pm MYT

KUALA LUMPUR (May 3): IWH CREC Sdn Bhd, a 60:40 joint-venture between Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (M) Sdn Bhd (CREC), has disputed claims by TRX City Sdn Bhd over the sale of a 60% equity interest in Bandar Malaysia Sdn Bhd.

“IWH CREC is concerned with the content of the termination notice and the subsequent press release issued by TRX City, which, given the factual matrix, does not fully and accurately reflect the circumstances and conduct of the parties in this matter,” IWH CREC said in statement today.

“IWH CREC takes this matter very seriously and is at present reviewing the content of the termination notice and press release with its advisors and legal counsel,” it added.

“A further announcement on this matter will be made in due course.”

Earlier today, TRX City announced that the share sale agreement that it had inked with IWH CREC in December 2015 had lapsed “despite repeated extensions being granted, making the agreement null and void with immediate effect”.

Following this, TRX City had said that it is immediately inviting expressions of interest for the role of master developer of Bandar Malaysia, with full ownership being preserved by the Ministry of Finance.

TRX City has spelt out strict criteria in selecting the new bid, which include “track record, speed of delivery and financial capability for such large-scale development”.

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