DutaLand Berhad has proposed to terminate the agreements governing the joint development of its Kenny Heights Development, formerly known as Bandar Sri Duta, following a mutual agreement with Olympia Industries Berhad’s subsidiary.
The proposed termination involves the Consortium Agreement dated 14 February 2003 between DutaLand’s wholly owned subsidiary KH Estates Sdn Bhd (KHE) and Olympia Properties Sdn Bhd (OPSB), a wholly owned subsidiary of Olympia Industries Berhad.
It also covers the Development Agreement dated 10 August 2007 between KHE, OPSB and KH Land Sdn Bhd, another wholly owned subsidiary of KHE.
Under the proposed termination, KHE, OPSB and KH Land have agreed to mutually terminate both agreements. KHE and OPSB will also enter into a separate deed of revocation to terminate the related Trust Deed.
The Kenny Heights Development involves the development of residential and commercial projects on the subject land, including condominiums, office blocks and a retail outlet or mall.
As part of the termination arrangement, KHE and OPSB have agreed on an independent agreed value of RM1.9 billion for the undeveloped land.
Of this amount, RM1.11 billion, or 58.2%, is attributable to KHE, while RM801.8 million, or 41.8%, is attributable to OPSB.
The agreed value was derived from the average market values assessed by an independent valuer and Olympia Industries’ appointed valuer, which valued the undeveloped land at RM1.92 billion and RM1.91 billion, respectively.
DutaLand said the difference between the respective valuations falls within the agreed 0.5% tolerance, meaning no payment or reimbursement will be required from either party.
Upon termination, the distribution of assets and liabilities, as well as income and expenses arising from the joint development up to the termination date, will be made according to the agreed ratio between KHE and OPSB.
Importantly, the proposed termination does not involve any transfer of land or payment of consideration between the parties.
The company has issued a circular to shareholders containing details of the proposed termination, together with an independent advice letter from Malacca Securities Sdn Bhd to non-interested shareholders.
