Gadang faces RM19 mil hit from termination of joint development in Cyberjaya

• The termination is in respect of the undeveloped phases of the project, Gadang said in a bourse filing on Friday. The project comprised four phases, with sub-phases within each phase. All but Phase 4—comprising sub-phases 4A, 4B and 4C—remained undeveloped.

KUALA LUMPUR (June 6): Gadang Holdings Bhd (KL:GADANG) announced it will allocate about RM19 million in additional costs for the financial year ending May 31, 2025 (FY2025), following the termination of an agreement to jointly develop a parcel of land in the Cyber 9 precinct of Cyberjaya with Cyberview Sdn Bhd.

The joint development agreement (JDA) was between Gadang's wholly owned Hillstrand Development Sdn Bhd (HDSB) and Cyberview, Cyberjaya's master developer. The agreement, inked in May 2014, was to develop a 121.49 acre plot within 10 years.

The termination is in respect of the undeveloped phases of the project, Gadang said in a bourse filing on Friday. The project comprised four phases, with sub-phases within each phase. All but Phase 4—comprising sub-phases 4A, 4B and 4C—remained undeveloped.

Gadang said HDSB had previously sought an extension of the implementation schedule to complete the project. Cyberview, in response, wanted an additional return of RM25 million for that, which HDSB was amenable to if the requisite planning approval to revise Phase 4C from commercial shop lots to serviced apartments could be obtained, which would support the proposed additional returns.

But the parties could not secure the necessary regulatory approvals, which led to the mutual termination of the JDA.

Gadang said HDSB had incurred RM40 million in development expenditure for the uncompleted Phase 4, and the joint venture parties had agreed to cap Cyberview's portion of the shared costs payable to HDSB at RM21 million.

The RM19 million provision will be reflected in Gadang's fourth quarter results for FY2025, which are expected to be announced in July.

Gadang shares closed unchanged at 25 sen on Friday, giving the construction firm a market capitalisation of RM200.22 million. Year-to-date, the stock has fallen by 25.4%.

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