Cahya Mata Sarawak aborts joint development of hotel, serviced apartments in Kuching Isthmus

• Shareholders of the JV company, Isthmus Developments Sdn Bhd, mutually decided to abort the project as it is "no longer desired by the shareholders", CMSB said in a bourse filing on Tuesday.

KUALA LUMPUR (Dec 31): Cahya Mata Sarawak Bhd (KL:CMSB) has aborted its joint venture project to build a four-star hotel and serviced apartments in Kuching Isthmus, a business district in Kuching, Sarawak, with its joint venture (JV) partners.

Shareholders of the JV company, Isthmus Developments Sdn Bhd, mutually decided to abort the project as it is "no longer desired by the shareholders", CMSB said in a bourse filing on Tuesday.

“Hence, the JV agreement shall cease to be valid and effective from Dec 31, 2024,” CMS said.

The partners inked the JV agreement back in December 2010 to build, manage and own a 381-room hotel with 96 units of serviced apartments on a 10.5-acre land in Isthmus Kuching — comprising two plots of land supplied by CMS Land.

CMSB's 51%-owned CMS Land Sdn Bhd held 3.23% in the Isthmus Developments. The largest shareholder was Premier Cottage Sdn Bhd with 54.57%, followed by Hikmat Majusama Sdn Bhd and Boulevard Jaya Sdn Bhd with 21.14% each.

“CMS Land will reimburse its shareholders the amount of RM3.23 million for the land improvement costs and authority costs for Lot 2839 and Lot 2852, which will remain under the ownership of CMS Land,” said CMSB.

When the JV was formed, CMSB said the hotel’s development was estimated to cost RM380 million. Construction was expected to commence in the first quarter of 2011 and be completed by December 2013. 

The remaining 49% in CMS Land is owned by Sarawak Economic Development Corp. The family of former Sarawak governor Tun Abdul Taib Mahmud controls about a 23% stake in CMS.

The group’s other substantial shareholders include Lembaga Tabung Haji (6.8%), Sarawak Economic Development Corp (5.67%) and Norges Bank.

Shares in CMS ended one sen or 0.84% higher at RM1.20 on Tuesday, valuing the group at RM1.29 billion.

Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!