Spring Gallery inks concept masterplan deal to develop Melaka plots

KUALA LUMPUR (July 28): Spring Gallery Bhd, which made headlines recently after a RM176 million job it secured last year was cancelled, said its unit has inked a deal to gain the rights to carry on and complete a concept masterplan for a development spanning 216,427 sq m in Melaka that is spread across seven plots of land.

Its wholly-owned unit Million Rich Development Sdn Bhd (MRDSB), inked a concept masterplan agreement (CMPA) for that today with Titanium Hallmark Sdn Bhd, which is in the midst of acquiring the plots — or the rights to them — for RM100.17 million for the development.

Under the CMPA, MRDSB will be given the rights to carry out and complete the concept masterplan on those lands (development land) and will bear all costs and expenses for all incidentals to and in connection with the concept masterplan.

"MRDSB is desirous of combining the development land with other lands which had been identified and/or other lands to be identified for the purpose of a large scale commercial development under a concept masterplan to be finalised," said Spring Gallery.

The other lands it was referring to are some 76,386 square meters of Melaka land for which it inked a similar CMPA with another firm on July 4.

The CMPA yesterday is conditional on Titanium Hallmark completing its acquisition of the lands or the development rights to the land.

On execution of the CMPA, MRDSB will pay Titanium Hallmark a security deposit of RM4.19 million on execution of the CMPA, and a further RM16.8 million within two months after Titanium Hallmark executes its sale and purchase agreements with regards to the plots.

The deposit, according to the announcement, will serve as “proof of funds” to show Spring Gallery's commitment to the CMPA.

If the lands were eventually sold to a third party instead of being jointly developed by Titanium Hallmark and MRDSB, the latter would be entitled to 10% of the actual sale price of about RM20.97 million.

Spring Gallery intends to finance the deposit with internal funds received from conversion of irredeemable convertible preference shares or funds available from the revocation of the RM176m managing contractor agreement announced on July 5.

As of closing, Spring Gallery edged higher by 1.45% to 70 sen yesterday with 58,700 shares traded, giving it a market capitalisation of RM119.7 million. — theedgemarkets.com

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