Pulau Jerejak seen from the Bayan Lepas coastal road.
PENANG: The Penang Development Corporation (PDC), the state development agency, has accepted an offer by Uda Holdings Bhd (UDA) to sell its stake in Tropical Island Resort Sdn Bhd (TIRSB) to Ideal Property Development Sdn Bhd (Ideal) for RM156 million.
PDC General Manager Datuk Rosli Jaafar said UDA had brought in Ideal to jointly develop their project and also buy out PDC's 49 per cent stake in accordance with PDC's conditions.
"Only after these conditions protecting PDC's interests had been fulfilled was the share sale agreement with Ideal's subsidiary company, Q Islands Development Sdn Bhd (Q Islands), signed this year," he said in a statement here on Friday.
TIRSB, a joint venture between UDA and PDC, which hold a 51 per cent and 49 per cent stake respectively, was appointed by Bestari Hospitality Management to operate the resort in Pulau Jerejak in 2004.
On Thursday, Penang Gerakan questioned the state government's plans on the enormous future development on Pulau Jerejak.
Rosli explained that in 1997, TIRSB was set up and PDC injected RM15.44 million into TIRSB for a 49 per cent stake while UDA contributed RM16.07 million for a 51 per cent stake.
"PDC also gave out a loan of RM3.4 million to TIRSB on Dec 28, 2007 at an interest rate of 3.5 per cent per annum and the loan principal and interest had increased to RM4.4 million by 2016.
"One of the conditions for accepting UDA's offer is that the RM4.4 million loan must be settled separately from the sale of the 49 per cent stake, and this was agreed to by UDA and the RM4.4 million loan was fully paid on April 2016," he said.
He said PDC will receive a total of RM160.4 million, adding with this equity sale, PDC will recover its cost of investment of RM15.44 million together with the shareholders' loan and interest of RM4.4 million which has also been paid by Ideal.
"We will make a profit of RM140.6 million while UDA will have 100 per cent control of TIRSB upon completion of the Novation Agreement," he said.
UDA, in a statement on Nov 8, confirmed undertaking a joint venture with Q Island Development on the project, which is expected to be completed in eight to 10 years. The total cost is yet to be determined.
According to UDA, the redevelopment plans have been approved by the state government. Four five-star hotels, 1,200 residential units, a marina, a theme park and a 11.5-km bicycle track will be built to promote tourism in the state. - Bernama
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