Ekovest deal to buy into IWH-CREC lapses after Bandar Malaysia deal fell through

KUALA LUMPUR (July 15): Ekovest Bhd said today it will not proceed with its heads of agreement (HOA) with Iskandar Waterfront Holdings Sdn Bhd (IWH) to buy into the Bandar Malaysia project, following the lapse of Putrajaya's RM7.4 billion sale of 60% in the project to a joint venture of IWH.

On Wednesday, it was announced that IWH-CREC Sdn Bhd's proposed acquisition of 60% in Bandar Malaysia from the Ministry of Finance's TRX City Sdn Bhd (TRXC) for RM7.4 billion lapsed in May as the parties involved did not meet the conditions precedent for the deal.

IWH-CREC is a 50:50 joint venture between IWH and China Railway Engineering Corp (M) Sdn Bhd.

"The company wishes to announce that it has been notified by IWH on July 15, 2021 that the restated and amended share sale agreement executed between TRXC and IWH-CREC had lapsed," said Ekovest in its filing today.

"Consequence on the above, the company and IWH will no longer proceed with the HOA dated Dec 8, 2020 as it is now deemed null and void," it said.

The HOA entailed Ekovest taking up 40% in a special-purpose vehicle which would in turn control 50% in IWH-CREC. At the time, Ekovest said its total investment commitment for the proposed participation and investment in the Bandar Malaysia project was approximately RM1.48 billion.

IWH and Ekovest share Tan Sri Lim Kang Hoo as common shareholder. The businessman controls 30.8% in Ekovest, while Lim's investment vehicle Credence Resources Sdn Bhd holds 63.13% in IWH.

Aside from the Bandar Malaysia project, Ekovest also last month called off plans to purchase 96.27 acres of land in Pulai, Johor from IWH for RM944.62 million, citing rising Covid-19 cases and the nationwide lockdown.

It was the second time the two parties called off the Iskandar Malaysia land sale. The first time, the agreement lapsed after the parties failed to agree on the pricing, which was initially agreed at RM1.05 billion.

Shares of Ekovest slid one sen or 2.53% at noon market break to 38.5 sen, valuing the group at RM1.04 billion.

Meanwhile, another counter linked to tycoon Lim, Iskandar Waterfront City Bhd's shares traded unchanged at 37.5 sen to value the group at RM340.88 million.

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