The exterior of Encorp Strand Mall.
KUALA LUMPUR: Encorp Bhd
, through indirect unit Encorp Bukit Katil Sdn Bhd, has aborted another joint development plan for Federal Land Development Authority’s (Felda) land in Bukit Katil, Melaka, this time with Tiong Nam Logistics Holdings Bhd’s unit Tiong Nam Properties Sdn Bhd.
Their memorandum of understanding (MoU) lapsed on Aug 30. with no conclusion reached on the negotiations between the parties, it told Bursa Malaysia.
“Upon the MOU expiry, neither party shall have any claim against the other, save and except for any antecedent claim,” the property development and construction group, which is 70.82% owned by Felda, told Bursa Malaysia.
No reason was given on why negotiations were ended without a further extension of the MoU.
On Oct 31 last year, Encorp Bukit Katil Sdn Bhd, the master developer of Felda’s 640.98-acre leasehold land in Bukit Katil, signed MoUs with three companies, including Tiong Nam Properties, to develop jointly parts of this land.
The MoU with Tiong Nam Properties was in respect of jointly developing 100 acres, while those with Sinmah Capital Bhd’s (formerly Farm Best Bhd) unit Sinmah Development Sdn Bhd and Kean Leng Construction Sdn Bhd were for jointly developing 100 acres and 49 acres, respectively.
On July 21, Encorp announced that the MoU with Kean Leng Construction would lapse at the end of July and the parties had mutually and amicably agreed not to further extend the validity period of the MoU.
However, Encorp Bukit Katil did enter into a joint venture and shareholders agreement with Sinmah Development and Sinmah Development JV Sdn Bhd - the joint-venture firm in which Encorp holds a 30% stake - on June 8.
Encorp and Sinmah proposed to develop commercial and/or other forms of building for commercial purposes, including medical college and hospital, and/or housing projects on two parcels of land totalling 77.94 acres. This proposed RM865mil development will be the first to kick off the development of the 640.98 acres in Bukit Katil.
Former Felda chairman Tan Sri Mohd Isa Abdul Samad had in June last year defended the acquisition by Encorp Bhd of the Bukit Katil land from its parent company for RM583.6mil to be paid on a deferred basis over 13 years. (Isa resigned as Encorp chairman earlier this month.)
The entire Bukit Katil project was estimated to have a gross development value (GDV) of RM3.2bil, In mid-2015, it was announced that the GDV would be RM4.9bil, but the project was later scaled down due to the state of the country’s property market.
Encorp had originally planned to launch the first phase of the development in the third quarter of 2017. The MoUs with the three proposed development partners were extended a few times.
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