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China is coming! Wrong. China is already here.
pK ‘If there was no 1MDB, Bandar Malaysia would belong to the people of Malaysia.’
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RM5.28 billion or RM7.41 billion?
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4 January 2016
Confusion after China firm says paid less for Bdr M’sia stake
Confusion after China firm says paid less for Bandar Malaysia stake https://www.malaysiakini.com/news/325432 @1MDB
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KINIBIZ Barely days after 1MDB announced the divestment of a majority stake in its 486-acre Bandar Malaysia development project, some confusion has emerged concerning the actual price tag for the 60 percent stake.
A regulatory filing by China Railway Group Ltd to the Hong Kong Stock Exchange (HKEx) made at 6.23pm, Jan 3 stated that the share sale agreement stipulates a price tag of RM5.28 billion for the 60 percent equity in Bandar Malaysia Sdn Bhd.
This is about 28 percent lower than the RM7.41 billion figure that 1MDB announced on Dec 31, 2015 for the deal.
China Railway Group, through its Malaysian arm, is a 40 percent partner in the joint venture that won the bidding for the 60 percent Bandar Malaysia stake.
It partnered Iskandar Waterfront Holdings (IWH), which is in turn a public-private partnership between Credence Resources Sdn Bhd (60 percent) and the Johor State government via state arm Kumpulan Prasarana Rakyat Johor Sdn Bhd (40 percent).
It is unclear why the amount stated to HKEx is substantially lower than the amount announced by 1MDB on Dec 31, 2015. However, it may come to a difference in wording used in respective announcements.
According to a 1MDB statement issued on Dec 31, 2015 the RM7.41 billion announced was for the joint venture’s 60 percent “share of land” in the Bandar Malaysia development project and did not explicitly attach the RM7.41 billion figure to equity in the holding company.
In contrast, the HKEx disclosure stated that the RM5.28 billion price was for “60 percent of the equity interest in Bandar Malaysia Sdn Bhd”, the holding company for the development project. For its part in the purchase, China Railway told HKEx that it will pay RM2.64 billion.
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When contacted 1MDB president and group executive director Arul Kanda asked for queries to be directed to the company’s communications department as he was in a meeting. At publication time KINIBIZ is still awaiting response to queries emailed to 1MDB. KINIBIZ is unable to immediately reach IWH and China Railway.
https://www.malaysiakini.com/news/325432
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ganesh
by Ganesh Sahathevan
There is no agreement on price and time of payment, and even the actual parties to the agreement to sell a 60% stake in Bandar Malaysia cannot be ascertained. The figure of RM 7.14 billion reported and accepted even by critics of 1 MDB is illusory and even 1 MDB’s Arul Kanda was not prepared to say when ,if ever,that sum will be paid.
Meanwhile, China Railway Engineering Corp , a Chinese state owned corporation that is supposed to be part of the consortium that entered into the deal with 1 MDB and its wholly owned subsidiary 1 MDBRE, is not admitting to be part of the deal and has instead got its Hong Kong listed subsidiary China Railway Group Limited (CRG), to make an announcement claiming that it and not its parent is the party to the deal. Worse, CRG has even disputed the headline price of RM 7.14 billion, admitting only to a sum that is about RM 2 billion less:
On 31 December 2015, the Joint Venture entered into the Share Sale Agreement with 1MDBRE, pursuant to which the Joint Venture will purchase 60% of the equity interest in BMSB held by 1MDBRE at a price of MYR5.279 billion.
The Chinese appear to have deliberately said “Joint Venture” rather than “consortium” as has been widely reported and that terminology may be designed to allow them to exit the deal,while collecting any payments due for engineering and construction works (for they are in essence a construction and engineering company).
Despite the headlines that proclaimed 1 MDB had “sold ” a 60% stake in the Bandar Malaysia project for RM 7.14 billion, thus putting in place the final part of a rationalization and debt repayment programme its chairman Najib Razak had promised would be done by the end of 2015, 1 MDB’s CEO Arul Kanda was actually quite candid, in a manner of speaking, in admitting that the main parts of the deal had yet to be worked out. As reported in THE STAR:
That sentiment was echoed by the Tan Sri Lim Kang Hoo who leads to consortium that is supposed to be the buyer:
Read the rest: http://sahathevan.blogspot.my/2016/01/bandar-malaysia-deal-china-railway.html
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Malaysian Insider
1MDB to sell 60% of Bandar Malaysia to Iskandar, China group for RM7.4 billion
1Malaysia Development Bhd (1MDB) has agreed to sell 60% of its equity in Bandar Malaysia Sdn Bhd for RM7.41 billion, as part of its rationalisation plan to reduce its RM45 billion debt, it says today.
The stake was sold to a consortium comprising Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corporation (M) Sdn Bhd, said 1MDB.
1MDB will receive a 10% deposit, or RM741 million, upon the execution of the share sale and purchase agreement, and the transaction is expected to be completed by end of June 2016.
The consortium valued the total Bandar Malaysia land at RM12.35 billion, said 1MDB.
Its president and group executive director, Arul Kanda Kandasamy, previously said the land would cost at least RM11.5 billion.
The IWH-CREC Sdn Bhd consortium is a 60:40 joint venture between IWH and CREC.
“The winning consortium together with the existing shareholders will resume the remainder of the commitments in Bandar Malaysia, which include the relocation of Pengkalan Udara Kuala Lumpur, a project that costs RM2.7 billion in its entirety.
“The RM2.4 billion sukuk will also be assumed by the project development company,” Arul Kanda told a press conference after the signing ceremony in Kuala Lumpur.
Tan Sri Lim Kang Hoo, the director and vice-chairman of IWH, said it “aggressively” bid for the project because the company saw it as an opportunity to build a new city centre in Kuala Lumpur.
“And we are also aggressive because we see that Bandar Malaysia is linked to Iskandar Malaysia with the high-speed rail.
“So that is the reason we were so aggressive with the pricing,” said Lim, who was also present at the press conference.
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weehingthong 