Magna Prima’s unit inks conditional development agreement for RM1.2bil project

KUALA LUMPUR: Magna Prima Bhd’s wholly-owned subsidiary Twinicon (M) Sdn Bhd has inked a conditional development agreement with Golden Rainbow View Sdn Bhd to undertake a mixed development on five parcels of adjoining freehold land in Kuala Lumpur with a gross development value (GDV) of RM1.2 billion.

The project would comprise commercial lots, "small office, home office” units, service apartments, office suites and a hotel, Magna said in a filing with Bursa Malaysia today.

The proposed joint development would see Twinicon as the owner of the land while Golden Rainbow as the appointed developer.

"Twinicon shall be entitled to 10 per cent of the project’s GDV, subject to a minimum sum of RM350 million (landowner's entitlement) for contributing the development land to the developer," Magna said.

The group expected the project to commence immediately upon the developer obtaining the development order from the relevant authorities, which is expected to be obtained by the third quarter of 2024 and to be developed over an estimated period of six years.

It said the development land is currently being charged to Hap Seng Credit Sdn Bhd due to an outstanding bank borrowing of approximately RM46.53 million, owing to Hap Seng Credit as at Dec 31, 2023.

The company intended to utilise RM45 million from the landowner's entitlement for the settlement of the Hap Seng borrowings, which is due by June 2024, it said.

Magna said the proposed joint development is expected to result in a pro forma loss to the group.

"The group shall reclassify the development land from investment properties to inventories.

"As a result, the group will recognise a proforma loss of RM197.83 million immediately arising from the reversal of fair value gain recognised by the group previously, to reflect the original cost of investment of RM171.82 million as the notebook value of the land," it added. - Bernama