Practice Note 17 (PN17) company Malaysia Pacific Corp (MPCorp) Bhd has squashed talks that it would be de-listed from the Main Market of Bursa Malaysia.
Chief executive officer and executive director Charles Ch'ng Soon Sen said the company is finalising its regularisation plan for submission to the relevant authorities for approval.
"In the last year, we have undertaken several deals to improve the financials of the company. Moving forward we are poised to be in a better position where we will be able to undertake property development projects on our own and expand the business of the company," he told NST Property.
Last year MPCorp sold of Wisma MPL, the first shopping cum office complex, located in Jalan Raja Chulan, Kuala Lumpur, for RM189 million to Asia New Venture Capital Holdings Sdn Bhd.
The sale was to settle its debts with RHB Bank Bhd, where it owed some RM148.54 million as a redemption sum for the land.
MPCorp and its subsidiaries namely Oriental Pearl City Properties Sdn Bhd, Lakehill Resort Development Sdn Bhd and Taman Bandar Baru Masai Sdn Bhd are also disposing off 52.5 hectares (ha) of land in Pasir Gudang, Johor, as settlement of debt owing to Amanahraya Development Sdn Bhd amounting to RM115 million.
Amanahraya and Oriental Pearl had a joint venture agreement (JVA) dated August 20, 2008, to develop LakeHill Resort City on several pieces of land measuring a total of about 256ha in Pasir Gudang. Both the parties would have profit-sharing arrangements under the JVA. The land is owned by Taman Masai.
In the following years, there was a dispute between the two parties. Subsequently, on September 21, 2012, Amanahraya served Oriental Pearl with a writ of summons for the sum of RM113.17 million together with an interest rate of 7.2 per cent per annum until the date of full settlement.
To resolve the dispute amicably, MPCorp, Oriental Pearl, Lakehill, Taman Masai, and Amanahraya entered into the 2019 Settlement Agreement (SA).
The SA served to net off the amount due from MPCorp to Amanahraya via the transfer of the lands in Johor as a full and final settlement of all disputes and claims of any nature between the parties.
The settlement sum of RM115 million is equivalent to the balance of the 2014 settlement sum which MPCorp had yet to pay to Amanahraya.
At MPCorp's extraordinary general meeting held on May 22, 2020, shareholders approved the settlement sum.
"The resolution was passed at the EGM. We are now completing the deal," said Ch'ng, who is the son of Datuk Bill Ch'ng and Datin Kong Yuk Chu, majority shareholders of MPCorp.
"It's all water under the bridge now. After the settlement with Amanahraya, MPCorp will have minimum liabilities and we can move on," he said.
As at June 30, 2019, MPCorp's current liabilities exceeded its current assets by RM120.5 million and the company recorded a deficit in its shareholders' equity of RM9.9 million.
Focus on land development in Johor
Ch'ng said the company will focus on developing its current land bank in Johor, where it will have remaining 80ha to 90ha after the settlement with Amanahraya.
The developer has also two JV property projects with Bina Puri Properties Sdn Bhd and Taiwan-based Chun Fu Development Sdn Bhd.
Its JV with Bina Puri is to build double-storey link houses (Seroja homes) in Taman Nusa Damai, Masai, worth RM270.88 million.
Ch'ng said the project was currently about 51 per cent completed.
Its JV with Chun Fu is to develop 16ha of land in Plentong.
"The project is still in the planning stage. For phase 1, we are anticipating a gross development value of about RM350 million," he said.
Ch'ng said the company is looking for investors to jointly develop some parcels of the remaining land in Pasir Gudang.
"We are talking to several investors, including developers but there is nothing concrete yet. The market is slow and we expect sluggish property market conditions to continue until the end of this year because of the global Covid-19 pandemic.
"We hope property buying activities to increase with the National Economic Recovery Plan (Penjana) incentives. The revived home-ownership campaign would certainly boost the sales of new residential properties," he said.
On the year to date basis, MPCorp's revenue decreased by RM8.05 million to RM3.02 million as compared to the proceeding year's corresponding financial year period ended March 31, 2019, of RM11.07 million.
The decrease in revenue for the current financial period was mainly due to loss of rental income upon completion of the disposal of investment property and slow construction progress, cancellation of SPA, and price rebate to the buyer in the property development segment.
The group recorded a pre-tax loss for the current financial period of RM2.1 million as compared to a pre-tax loss in the preceding year's corresponding period ended 31 March 2019 of RM12.73
million.
The decrease in loss was saving from bank interest waived after recognize the full settlement of the RHB bank loan account.