Zelan receives demand notices for RM108m over Meena Plaza job

KUALA LUMPUR (Dec 18): The Abu Dhabi branch of Zelan Holdings (M) Sdn Bhd (ZHSB), which is a wholly-owned subsidiary of Zelan Bhd, has received two notices of demand from Meena Holdings LLC for a combined AED92.53 million (RM108 million).

Meena Holdings owns the Meena Plaza mixed-use development project in Abu Dhabi, the United Arab Emirates (UAE).

In a filing with Bursa Malaysia today, Zelan said ZHSB had received the notifications from HSBC Bank Middle East Ltd informing it that the bank had on Dec 17 received two notices of demand from Meena Holdings.

The notices are in respect to two guarantees issued by the bank on Aug 28, 2014, amounting to AED40.98 million and AED51.55 million respectively.

"Based on the advice given by [our] legal counsels in Abu Dhabi, [we] shall take the necessary steps to refute and contest the validity of the abovementioned demands made by Meena Holdings, [and we] will make further announcements on any material development on the matter," said Zelan.

To recap, Zelan had on Sept 17 issued a notice to Meena Holdings to terminate a contract for a package of works for the Meena Plaza project, which was first inked on April 1, 2008.

Zelan said Meena Holdings had failed to pay it AED27.6 million (RM32.19 million) of completed work and materials at site.

The firm added that it had also terminated the contract due to continuous interference with the valuation and certification of ZHSB's progress claims.

As at 3.31pm, Zelan shares were trading down one sen, or 3.7%, at 26 sen, with a market capitalisation of RM228.12 million. --- theedgemarkets.com