Magna Prima Bhd’s proposed restructuring and rehabilitation of the troubled 8 Conlay mixed-use development in Kuala Lumpur involves a total commercial entitlement capped at RM700 million, which will be satisfied through the issuance and progressive redemption of redeemable secured loan securities (RSLS).
The arrangement forms part of the Rehabilitation Agreement entered into by Magna Prima’s wholly owned subsidiary, Permata Juang (M) Sdn Bhd (PJSB), with Damai City Sdn Bhd (DCSB), which is in liquidation and under receivership, and Delta 8 Sdn Bhd (DSB), the special purpose vehicle for the restructuring.
The RM700 million Company Entitlement represents DCSB’s agreed commercial entitlement arising from the transfer of the development business undertaking to DSB and the subsequent assumption of specified liabilities by PJSB.
Magna stressed that the RM700 million is not the purchase price of the land or the development business undertaking.
Instead, the amount represents the agreed commercial allocation under the integrated restructuring transaction and will be fully satisfied through the issuance and progressive redemption of RSLS across various classes, namely A1, A2, B, C1, C2 and D.
The RM700 million entitlement was agreed on a willing-buyer, willing-seller basis after taking into consideration the independent valuation of the land and buildings forming part of 8 Conlay.
City Valuers & Consultants Sdn Bhd had valued the land and buildings at RM721 million as at June 23, 2025, using the residual method of valuation.
Under the residual approach, the value of a property with development potential is derived by estimating its value upon completion of development and deducting the costs required to undertake the development, including a developer’s profit.
Magna Prima said its board took into consideration the fact that the RM700 million Company Entitlement is below the RM721 million market value, as well as the rationale and prospects of the proposed development, when determining the agreed entitlement.
In addition to the RSLS arrangement, PJSB has committed to provide RM70 million in cash to DCSB’s solicitors to be held in escrow.
The cash covenant will be funded through Magna’s internally generated funds and/or borrowings, if required, and will be applied as an advance redemption payment against the relevant classes of RSLS.
Under the proposed restructuring, and subject to the fulfilment of conditions precedent and the relevant court orders, DCSB will reorganise the holding of the integrated property development undertaking through DSB.
This encompasses the 8 Conlay development, the 3.65-acre freehold land, continuation assets, existing sale and purchase agreements (SPAs), arrangements for existing purchasers and the development rights needed to finance, develop, construct, manage, complete and commercialise the project
The restructuring also incorporates a framework for the 564 existing purchasers who had previously bought units in 8 Conlay — comprising 404 units in Tower A and 160 units in Tower B.
Subsequent to the announcement, the trading of Magma Prima was halted this morning.
