Tiger Synergy, LJ Development to develop RM80 mil GDV project in Klang

KUALA LUMPUR (July 4): Tiger Synergy Bhd, together with landowner LJ Development (KL) Sdn Bhd, will undertake a residential and/or commercial development with an estimated gross development value (GDV) of RM80 million in Klang, Selangor.

In a filing with Bursa Malaysia yesterday, Tiger Synergy said its wholly-owned subsidiary Pembinaan Terasia Sdn Bhd last Friday signed a memorandum of understanding (MoU) with LJ Development for the proposed project.

Under the MoU, the two companies agreed to negotiate exclusively the detailed terms and conditions of the proposed joint venture (JV) with the intention to finalise and enter into an agreement within six months.

“Pembinaan Terasia will be given the exclusive right to develop and to carry out construction on the development land,” said Tiger Synergy.

Upon commencement of the construction and sale of the residential and/or commercial unit(s) of the project, LJ Development will be entitled to receive from Pembinaan Terasia a total number of units equivalent to 30% of the project’s GDV or market value, whichever is higher.

Tiger Synergy said the proposed JV allows it to expand the operation of its property segment and to complement the company’s existing business activities.

The deal is a related-party transaction as LJ Development’s directors Tan Li Li and Johanna Yong Hui Fun are family members of Tiger Synergy’s executive chairman Datuk Tan Wei Lan, executive director Datin Sek Chian Nee and managing director Tan Lee Chin.

Meanwhile, in a separate filing with Bursa, Tiger Synergy said its JV agreement with landowner Credence Property Management Sdn Bhd to develop a residential and/or commercial development on neighbouring land to LJ Development’s in Klang, has been mutually revoked.

Tiger Synergy Development Sdn Bhd, another wholly-owned subsidiary of Tiger Synergy, on April 29, 2015 entered into a JV agreement with Credence Property Management for the proposed project.

However, Tiger Synergy said the proposed JV agreement has been mutually revoked and the consideration sum of RM3 million has been refunded by Credence Property Management to the company.

Instead, Tiger Synergy re-entered into the JV agreement with Credence Property Management via Pembinaan Terasia last Friday to undertake the proposed project with a higher consideration sum of RM5 million, from RM3 million previously.

Tiger Synergy said the estimated cost of the entire project is approximately RM36 million, which it will fund via internal funds and bank borrowings.

It added that the expected completion date of the project is three years from the date of the relevant authorities’ approval of the layout plan.

Similar to LJ Development, Credence Property Management will retain units in the completed properties equivalent to 30% of GDV, also estimated at RM80 million, or market value, whichever is higher.

Tiger Synergy shares closed unchanged at 6.5 sen yesterday, with a market capitalisation of RM95.68 million.

This article first appeared in The Edge Financial Daily, on July 4, 2017.

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