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TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : NON RELATED PARTY TRANSACTIONS JOINT VENTURE BETWEEN SURIA CAPITAL HOLDINGS BERHAD ("SURIA") AND SBC CORPORATION BERHAD ("SBC") TO DEVELOP 16.25 ACRES LAND AT TANJUNG LIPAT, KOTA KINABALU, SABAH

SURIA CAPITAL HOLDINGS BERHAD

Type Announcement
Subject TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS)
NON RELATED PARTY TRANSACTIONS
Description
JOINT VENTURE BETWEEN SURIA CAPITAL HOLDINGS BERHAD ("SURIA") AND SBC CORPORATION BERHAD ("SBC") TO DEVELOP 16.25 ACRES LAND AT TANJUNG LIPAT, KOTA KINABALU, SABAH

We refer to our announcements on 6 December 2018, 23 September 2016, 16 May 2014, 20 November 2013, 9 October 2013, 16 August 2013, 12 June 2013, 27 May 2013 and 21 May 2013 respectively.

 

The Board of Directors of Suria ("the Board") wishes to announce that following the successful sub-division of the master land title of 23.25 acres of Kota Kinabalu Port Land, SBC, being the joint venture partner for the development of 16.25 acres land namely Jesselton Quay (“JQ”) Project which carries a minimum net saleable value of RM1.8 billion, had commenced construction on Parcel B measuring 4 acres, called the Jesselton Quay Central (“JQC”) in the first quarter of 2017. Due to the imposition of the Movement Control Order by the Federal Government which had affected the progress of the construction works, JQC is now targeted to be completed by the end of year 2021. The development of Parcel A on the remaining 12.25 acres land, however, has yet to commence and is currently under the re-planning stage to take into account the prevailing market condition impacted by the COVID-19 pandemic.

 

Under Schedule 2 of the Joint Venture Agreement (“JVA”) dated 21 May 2013, Suria is expected to receive its Fourth Payment of RM26 million in cash on 26 July 2020, being the 3rd anniversary after the Second Payment which was made following the presentation of the third-party charge in July 2017.

 

Suria and SBC have, on 29 March 2021, agreed to enter into the seventh supplemental letter to the JVA (“Seventh Supplemental Letter”) to record the mutual agreement of both Parties to vary the fourth payment of Suria’s entitlement amounting to RM26 million (“Fourth Tranche”). Part of the Fourth Tranche amounting to RM1 million had been paid to Suria prior to the date of this Seventh Supplemental Letter.

 

Pursuant to the above, the Board has agreed to vary the balance of payment of the Fourth Tranche amounting to RM25 million to be paid or settled by Jesselton Quay Properties Sdn Bhd, a wholly-owned subsidiary of SBC which the rights under SBC for JQ Project had been novated to pursuant to a Novation Agreement dated 26 November 2014, together with interest on late payment calculated pursuant to the JVA. The variations to the balance of payment of the Fourth Tranche are in the following manner:

 

(a) In the form of cash payment amounting to RM15 million in accordance with the following payment milestones; and

 

Payment Milestone

Amount

Payment Date

(i)

RM5 million

31 March 2021

(ii)

RM2 million

31 July 2021

(iii)

RM2 million

30 September 2021

(iv)

RM2 million

31 October 2021

(v)

RM4 million

31 December 2021

 

(b) The balance of RM10 million in the form of the delivery of completed units of Gallery Shoppes within JQC (hereinafter referred to as “entitlement-in-kind”).

 

With the receipt of Suria’s entitlement in the form of entitlement-in-kind, Suria will be able to generate future recurring rental income in view of the much sought-after commercial properties in the vicinity of the central business district of Kota Kinabalu.

 

JQC comprises two towers of 25-storey commercial suites, one tower of 8-storey office, Gallery Shoppes and a tropical-themed recreation club at the podium top. JQC is expected to be completed with an Occupation Certificate obtained in the fourth quarter of the year. The 8-storey office will be built up to a 25-storey hotel when market condition normalises.

 

The Board, having taken into consideration all aspects, is of the opinion that the variation to the Fourth Payment is in the best interest of Suria in ensuring the successful completion of JQC during this challenging time.

 

This announcement is dated 29 March 2021.






Announcement Info

Company Name SURIA CAPITAL HOLDINGS BERHAD
Stock Name SURIA
Date Announced 29 Mar 2021
Category General Announcement for PLC
Reference Number GA1-17032021-00050




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