IWCity feels pinch from Bandar Malaysia fallout IWCity feels pinch from Bandar Malaysia fallout
Share this on WhatsAppWith its share price slipping lower, Iskandar Waterfront City Bhd’s (IWCity) is truly feeling the heat amidst uncertainties surrounding the Bandar... IWCity feels pinch from Bandar Malaysia fallout

With its share price slipping lower, Iskandar Waterfront City Bhd’s (IWCity) is truly feeling the heat amidst uncertainties surrounding the Bandar Malaysia project in Kuala Lumpur.

Yesterday, The Edge reported that the company’s share price dipped by as much as 6.88% (or 13 sen) to RM1.76, and while it pared down some negative losses in the afternoon session, it remains in the negative zone.

The negative slide began earlier this month, with IWCity’s share price falling some 43.8% from RM3.22 on May 2. It is estimated that nearly RM900 million in market capitalisation has thus far been wiped out.

The large-scale development is to take shape on 486 acres of strategic land in Sungai Besi.

The root cause is evidently the extensively-publicised termination of a deal by TRX City Sdn Bhd (announced on May 3) to sell a 60% stake in the much-hyped Bandar Malaysia project on the former air force base on prime KL land to IWH CREC Sdn Bhd for RM7.41 billion.

TRX City is a former unit of 1 Malaysia Development Bhd, while IWH CREC is a joint venture between Iskandar Waterfront Holdings Sdn Bhd (an associate company of IWCity) and China Railway Engineering Corp.

Businessman Tan Sri Lim Kang Hoo is the common major shareholder in IWCity and IWH. Making the situation intriguing is the fact that the Johor state government owns 40% of Iskandar Waterfront Holdings through Kumpulan Prasarana Rakyat Johor Sdn Bhd.

Momentarily, share prices picked up earlier in the week with news that Najib could be reconsidering the deal, but since, uncertainties have been growing about whether Iskandar Waterfront Holdings will have the chance to participate in any consortium to submit a bid for the development.

Tan Sri Lim Kang Hoo is the common major shareholder in IWCity and IWH.

At the recent share price of RM1.81, IWCity’s market capitalisation stands at RM1.48 billion.

The collapse of the Bandar Malaysia deal has also negatively impacted an earlier proposed merger of IWCity and IWH via a share swap exercise. The Bandar Malaysia project was to be the “crown jewel” of the exercise.

The large-scale development is to take shape on 486 acres of strategic land in Sungai Besi that once served as the country’s first airport before being re-purposed as an air force base.

On Wednesday this week, Prime Minister Datuk Seri Najib Tun Razak said TRX City will soon announce the request for proposal process to select the master developer of the Bandar Malaysia real estate project.

The Prime Minister also said that the selection of a master developer would involve strict criteria. A proven track record, speed of delivery, content creation and the financial capacity deliver a project of this magnitude are key prerequisites.

Meanwhile, separate news reports suggest that Najib has also discussed the possibility of China-based Dalian Wanda becoming Bandar Malaysia’s master developer.

However, any serious move in this direction by the government remains unconfirmed.

The new master developer of the project will have to meet strict criteria.

Property 360 Online

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