Wednesday, 18 January 2017

(The Star) JV to build RM3.5bil housing project called off

KUALA LUMPUR: The proposed collaboration between Malaysia’s and Indonesia’s top property developers -- Sime Darby BhdSP Setia Bhd, Permodalan Nasional Bhd’s unit I&P Group Sdn Bhd and PT Hanson International Tbk -- to develop a RM3.5bil housing project in Jakarta, has been cancelled.
In a filing with Bursa Malaysia yesterday, SP Setia said its unit SP Setia (Indonesia) Sdn Bhd, along with Sime Darby and I&P, had decided not to pursue the joint venture.
The Malaysian companies are exercising the right to terminate with immediate effect the memorandum of understanding (MoU), which was signed in August last year on the sidelines of the World Islamic Economic Forum in Jakarta.
No reason was given. The MoU’s validity period would have lapsed in March.
Under the MoU. they and PT Hanson, one of Indonesia’s largest property developers by landbank, had proposed to jointly develop an affordable housing project with a gross development value of RM3.5bil.
The project was to be located on 500ha in Maja, Tangerang (about 80km from Jakarta), next to an existing township called Citra Maja Raya that was being developed by PT Hanson in partnership with Ciputra Group.
According to SP Setia’s announcement then, the Malaysian companies would have an equity interest of 20% each while PT Hanson would hold the remaining 40%. However, the parties were to continue negotiations to finalise the details and work on an agreement within three months.

In October last year, the four parties inked a supplemental MoU to extend the MoU’s validity period by four months, from Nov 2, 2016 to March 2, 2017.