Bandar Malaysia price was always to be determined on a gross, not net basis:Arul Kanda contradicted by transaction advisor CH WTW

by Ganesh Sahathevan


Presented here as reported in The Star, 27 June 2015:

“We are looking at equity participation. The asset of this company is the land,” says managing director Foo Gee Jen.
He said  whoever comes in will have to calculate or make an assumption of the land value, make a bid on the land value on a gross basis, determine what sort of equity partnership and other criteria."
"They will have to determine their own equity (with respect to their consortium partners), payment terms – cash up front, deferred payment terms – and their respective investments, he (said)."
CH Williams is the transaction advisor for 1MDB RE Sdn Bhd which is the master developer of 486 acres located on the fringe of the city.

1MDB clarified yesterday that the valuation contained in the announcement made by CREC to HKEx did not refer to the land sale valuation, but instead to their estimated share of the net equity value of the Bandar Malaysia project.
This, it said, was based on certain assumptions that are subject to further negotiations during the completion period between January and June 2016.
“The starting point of any net equity value calculation is the land sale valuation of RM12.35bil, of which the consortium’s 60% share equates to RM7.41bil.
“This is the basis upon which the 10% deposit of RM741mil has been calculated and agreed upon by all parties,” said 1MDB in a statement.
During the completion period, 1MDB explained that adjustments may be made to the RM7.41bil land sale valuation, depending on whether or not certain Bandar Malaysia related liabilities can be passed to the consortium.
These liabilities include the remainder contract costs for relocation of the existing facilities and the Bandar Malaysia sukuk debt.
“The agreement executed between the parties on Dec 31, 2015 provides for a robust and objective mechanism to determine, among others, these matters, which all parties have committed to.

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