MEH to clear 90pc of debt in 2 months

Mammoth Empire Holding Sdn Bhd executive director Datuk Danny Cheah says it will complete the Empire City Damansara 1 project by 2022.

By Sharen Kaur - NST Business, June 17, 2019 

KUALA LUMPUR: Mammoth Empire Holding Sdn Bhd (MEH), the developer of Empire City Damansara (ECD1) in Petaling Jaya, expects to clear up to 90 per cent of its debt within two months and complete the development by 2022.

MEH recently sold 28.12ha of undeveloped land — comprising 26.3ha in Petaling Jaya meant for the Empire City Damansara 2 (ECD2) project and 1.82ha in ECD1 — to Exsim Group, a timber company turned developer.

Proceeds from the land sale would be used to pare down the group’s debt, said MEH executive director Datuk Danny Cheah.

He declined to reveal the value of the deal but the market speculated it could be worth up to RM800 million.

MEH had last year agreed to sell a 8.09ha plot in ECD2 to Asset Kayamas Group and another 18.2ha to a joint venture (JV) between Exsim Development Sdn Bhd and Binastra Construction Sdn Bhd.

It was reported that Asset Kayamas, founded by Tan Sri Chai Kin Kong in 2011, had paid RM236 million, or RM270.90 per sq ft, for the 8.09ha plot.

However, Cheah said the deal was terminated at end last year, as mutually agreed by both parties.

“The sales and purchase agreement was terminated as there were certain conditions precedent that could not be met. So we sold the land (8.09ha) together with the 18.2ha to Exsim. The agreement was signed about two months ago.”

MEH had bought the 26.3ha in 2011 for RM187.53 million. The land is located horizontally across from the 11.7ha ECD1 along Lebuhraya Damansara-Puchong heading towards Kepong/Bandar Sri Damansara.

Cheah said the disposal of land in ECD2 and in ECD1, coupled with the JV agreements with Exsim Group to develop land in ECD1, would reduce MEH’s debt by 90 per cent.

“We have redeemed RM280 million in loan from Maybank and RM160 million from Affin Bank,” said Cheah.

MEH, through its wholly-owned subsidiary, had taken a RM300 million loan four years ago for the Empire City Mall and has settled part of it.

“Part of the proceeds from the Exsim deal will be used for the mall development. The mall is 80 per cent completed and we are on target to finish it by 2021,” said Cheah.

“This is a new beginning for MEH in the property development market. We have Exsim as our strategic partner. Exsim has a strong brand and they have been in the market since 2008. With Exsim in, ECD1 is set to complete by 2022,” he said.