KUALA LUMPUR: Damansara Realty Bhd’s unit Damansara Realty (Johor) Sdn Bhd (DRJ) has given a letter of award to O&C Resources Bhd (OCR) to develop a 1Malaysia Civil Servants Housing (PPA1M) project in Precinct 5, Putrajaya.
OCR, a rubber product maker that last year diversified into property development and construction, told Bursa Malaysia that the final governing contract would include a turnkey construction contract between it and DRJ for the PPA1M portion estimated to be worth RM324mil.
There will also be a commercial and collaboration agreement - or a contract of that nature - between OCR and DRJ for the non-PPA1M, or commercial portion, of the project.
To recap, in October last year, DRJ inked a development agreement with Putrajaya Corp whereby DRJ secured the right to develop 1,350 residential units and 45 commercial units at Precinct 5, Putrajaya. It was announced then that the development was scheduled to be completed by the end of 2019.
On the PPA1M portion, OCR said the terms on the profit earned had yet to be finalised and agreed on.
Meanwhile, for the non-PPA1M portion, it said the parties were expected to negotiate and agree that DRJ would be entitled to 20% of the profit earned.
The cumulative profit for DRJ, however, would not be less than RM10mil, OCR said. Otherwise, it would pay DRJ the difference.
OCR, which will source its own financing for the job, said the duration of the project was expected to be four years.
The contract sum was estimated at RM324mil, it added.
OCR does not expect the project to contribute any earnings and net assets of the OCR group for the financial year ending July 31, 2017.
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