By Sharen Kaur
Published in NST on July 23, 2013
LEGAL OBSTACLE REMOVED: Path cleared for MRCB to take over mega PJ project
Malaysian Resources Corp Bhd (MRCB) has cleared a big legal obstacle in its plans to take over a multi-billion ringgit project in Petaling Jaya, Selangor.
Yesterday, an injunction filed against MRCB was dropped by PKNS Holdings Sdn Bhd which however, proceeded with its injunction against Nusa Gapurna Development Sdn Bhd (NGD).
PKNS previously filed a suit in mid-June to block the sale of PJ Sentral Development Sdn Bhd (PJSD) by first defendant NGD to MRCB, the second defendant.
This was on the grounds that NGD had breached a shareholders’ agreement between the two companies with PJSD and that MRCB had “intentionally or recklessly procured a breach of the shareholders’ agreement”.
MRCB and NGD’s parent, Gapurna Sdn Bhd, had earlier sealed a deal for the former to buy certain Gapurna assets, including the PJ Sentral project. In return, Gapurna will own a controlling stake in MRCB.
PJ Sentral is PJSD’s project, which is 70 per cent owned by NGD.
The latter, in turn, is 60 per cent owned by Gapurna and 40 per cent by the Employees Provident Fund (EPF). PKNS holds the remaining 30 per cent PJSD stake.
MRCB yesterday said PKNS informed the High Court that the injunction application was withdrawn with no order to costs.
However, PKNS — a unit of the Selangor State Development Corp — maintained the injunction application against NGD.
“The High Court had fixed the matter for decision on August 1,” MRCB said in a brief filing to Bursa Malaysia.
A positive judgment for Gapurna next Thursday will augur well for MRCB.
The group will have a new mega project in hand to help boost its earnings, besides contribution from the Kuala Lumpur Sentral transport hub in Brickfields.
The deal with Gapurna sees MRCB buying NGD for RM111 million in cash and 398.7 million new shares at RM1.55 each. This was sweetened with 113.9 million free warrants on the basis of two warrants for every seven MRCB shares to be issued.
Besides the land encompassing PJ Sentral, the deal also involves two other parcels of land in Subang Jaya and Jalan Klang Lama and NGD’s construction and security services arms.
PKNS and NGD had offered to buy out each other’s share in PJSD but both rejected the offer.
NGD reportedly offered PKNS around RM86 million for its 30 per cent stake, while PKNS offered NGD RM220 million for its 70 per cent share.
Business Times had in late June quoted a PKNS source as saying that the company was finally willing to sell its 30 per cent stake in PJSD to NGD and settle the dispute out of court.
An NGD official also said it was willing to settle the issue out of court but PKNS was asking for more than RM100 million for its 30 per cent stake.
Two weeks ago, both the PJSD shareholders were reported to be back in a court tussle.
Published in NST on July 23, 2013
LEGAL OBSTACLE REMOVED: Path cleared for MRCB to take over mega PJ project
Malaysian Resources Corp Bhd (MRCB) has cleared a big legal obstacle in its plans to take over a multi-billion ringgit project in Petaling Jaya, Selangor.
Yesterday, an injunction filed against MRCB was dropped by PKNS Holdings Sdn Bhd which however, proceeded with its injunction against Nusa Gapurna Development Sdn Bhd (NGD).
PKNS previously filed a suit in mid-June to block the sale of PJ Sentral Development Sdn Bhd (PJSD) by first defendant NGD to MRCB, the second defendant.
This was on the grounds that NGD had breached a shareholders’ agreement between the two companies with PJSD and that MRCB had “intentionally or recklessly procured a breach of the shareholders’ agreement”.
MRCB and NGD’s parent, Gapurna Sdn Bhd, had earlier sealed a deal for the former to buy certain Gapurna assets, including the PJ Sentral project. In return, Gapurna will own a controlling stake in MRCB.
PJ Sentral is PJSD’s project, which is 70 per cent owned by NGD.
The latter, in turn, is 60 per cent owned by Gapurna and 40 per cent by the Employees Provident Fund (EPF). PKNS holds the remaining 30 per cent PJSD stake.
MRCB yesterday said PKNS informed the High Court that the injunction application was withdrawn with no order to costs.
However, PKNS — a unit of the Selangor State Development Corp — maintained the injunction application against NGD.
“The High Court had fixed the matter for decision on August 1,” MRCB said in a brief filing to Bursa Malaysia.
A positive judgment for Gapurna next Thursday will augur well for MRCB.
The group will have a new mega project in hand to help boost its earnings, besides contribution from the Kuala Lumpur Sentral transport hub in Brickfields.
The deal with Gapurna sees MRCB buying NGD for RM111 million in cash and 398.7 million new shares at RM1.55 each. This was sweetened with 113.9 million free warrants on the basis of two warrants for every seven MRCB shares to be issued.
Besides the land encompassing PJ Sentral, the deal also involves two other parcels of land in Subang Jaya and Jalan Klang Lama and NGD’s construction and security services arms.
PKNS and NGD had offered to buy out each other’s share in PJSD but both rejected the offer.
NGD reportedly offered PKNS around RM86 million for its 30 per cent stake, while PKNS offered NGD RM220 million for its 70 per cent share.
Business Times had in late June quoted a PKNS source as saying that the company was finally willing to sell its 30 per cent stake in PJSD to NGD and settle the dispute out of court.
An NGD official also said it was willing to settle the issue out of court but PKNS was asking for more than RM100 million for its 30 per cent stake.
Two weeks ago, both the PJSD shareholders were reported to be back in a court tussle.
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