KUALA LUMPUR (March 1): JAKS Resources Bhd said it has received a notice of demand from Star Media Group Bhd, requiring it to complete and deliver Tower A of the Pacific Star project by end-June 2018.

It is also requiring that JAKS complete all other obligations undertaken by its wholly-owned unit JAKS Island Circle Sdn Bhd (JIC) in the sale and purchase agreement (SPA) signed by JIC in August 2011.

Star has given JAKS seven days to respond to its demands, JAKS said in a stock exchange filing today. It said the notice of demand was received yesterday (Feb 28).

"The company has instructed its solicitors to study the matter and advise on the appropriate actions," JAKS said.

Star's notice came after JAKS announced on Feb 26 that it has secured an interim stay from the courts to restrain two banks from releasing guarantee proceeds totalling RM50 million to Star.

The stay order would last until the High Court hears the inter-parte injunction applications submitted by JIC on March 7.

Pending the court's decision, JAKS said the ongoing operations of the group and JIC — including the development of Pacific Star — remained unaffected and would progress on schedule.

JAKS previously said Star's call on the bank guarantee on Feb 15 was baseless, and that its subsidiary had valid and sufficient grounds to support its view.

Pacific Star is a project comprising Tower A — a 15-storey office block, a 13-storey office suites building (Tower B), two 24-storey residential blocks (Tower C and E), a 15-storey residential block (Tower D), four levels of basement car park as well as a podium, which consists of car parks, office suites and a four-storey commercial centre known as Pacific Star Business Hub.

On Aug 19, 2011, JIC executed the SPA with Star to acquire a leasehold land located in Section 13, Petaling Jaya from Star for RM135 million, to be satisfied via cash and in kind with the delivery of Tower A.

The SPA's terms stated that JIC is to provide a RM50 million irrevocable and on demand bank guarantee in favour of Star guaranteeing the completion and delivery of Tower A to the latter within three years from vacant possession date or three years from the date of the approval of the agreed plans for Tower A, whichever is later.

JAKS however said STAR had, in the course of JIC's development and execution of Tower A, instructed various changes to be made on Tower A that had prevented JIC from completing Tower A. Hence, it is of the view that it should have been given more time to complete Tower A.

JAKS fell 1 sen or 0.59% to close at RM1.68, giving a market capitalisation of RM831.56 million.