1MDB sells Bandar Malaysia land to Johor, Chinese consortium
(Malay Mail Online) – 1Malaysia Development Bhd (1MDB) announced today that China Railway Engineering Corporation Sdn Bhd and Johor-based Iskandar Waterfront Holdings will purchase a 60 per cent stake in its Bandar Malaysia land bank.
The state-owned investment firm will receive RM7.42 billion from the sale, which is part of its third and final rationalisation plan to settle its outstanding debt.
“We are delighted with the outcome. We have received fair terms from both parties in the negotiations.
“This will represent a new beginning to take [the Bandar Malaysia project] to the next level,” 1MDB president and chief executive Arul Kanda Kandasamy told reporters after witnessing the sales signing ceremony here.
1MDB will receive an initial deposit of 10 per cent or RM741 million, with the rest upon completion of the transaction expected by end of June 2016.
The IWH-CREC consortium valued the land parcel at RM12.35 billion.
The consortium known as IWH-CREC Sdn Bhd is a 60:40 joint venture between IWH and CREC.
The Johor state government owns 40 per cent of IWH through Kumpulan Prasarana Rakyat Johor Sdn. Bhd.
1MDB embarked on three-legged rationalisation plan that began in June this year, beginning with the share swap deal with Abu Dhabi-based International Petroleum Investment Company (IPIC) and the sale of its priced energy assets Edra Global Energy Bhd to a Chinese firm in November.
Both the deals will reduce the firm’s debt by RM24 billion, but critics contend that 1MDB and Putrajaya, which owns 1MDB through the Finance Ministry, are selling key national assets to foreigners.
But Arul dismissed today the claim as inaccurate, saying that IWH’s involvement in the Bandar Malaysia project meant the Malaysian and Johor governments still own 54 per cent of the project, which was proof that the country remained the key decision maker despite today’s sale.
The 1MDB president said CREC was chosen for its reputation as a major global construction player, noting that the Chinese firm has a presence in over 70 countries and was involved in building projects in Malaysia like the Duta-Ulu Klang Expressway (DUKE).
Bandar Malaysia, located on a land which currently houses the Royal Malaysian Air Force base, will become Malaysia’s first integrated transit-oriented, mixed-use cluster.
Just 7km away from the capital city centre, the development will serve as Kuala Lumpur’s gateway for the high speed rail-line to Singapore and become a central transport hub.
