KUALA LUMPUR (May 17): EcoFirst Consolidated Bhd announced today that it has called off plans to acquire a 70% stake in private property development firm Geo Valley Sdn Bhd for RM44 million cash.

In an exchange filing today, EcoFirst said the agreements were terminated because certain conditions were not fulfilled within the three-month deadline, and that the parties were unable to mutually agree to the extension of the cut-off date. 

“The board wishes to announce that the company has on May 17, 2019 served a notice of termination to Geo Valley and the vendors to terminate the subscription agreement and share sale agreement.

“Pursuant to the termination, the earnest deposit and the balance deposit held by the vendors’ solicitors as stakeholders, shall be refunded to the company within fourteen days from the date of the notice of termination, failing which, late payment interest at rate of 8% per annum shall be chargeable on daily basis,” EcoFirst said.

In December 2018, EcoFirst had proposed to subscribe for a 20% stake in Geo Valley for RM13,333.46, followed by an acquisition another 50% stake for RM44 million from Geo Valley shareholders.

EcoFirst had planned to acquire Geo Valley to enlarge the group’s land bank for future development projects and for positive earnings and cash flow contributions for the group, in line with its core business.

Geo Valley is developing a RM1.25 billion gross development value (GDV) mixed residential and commercial project in Paya Terubong, Penang.

The company was granted planning permission on Dec 9, 2015 and building plan approval on June 21, 2016 by the City Council of Penang Island, for the development of three blocks of medium cost apartments and one block of controlled price apartments and commercial shoplots on one out of the seven pieces of land measuring 21.73 acres.

EcoFirst said the termination is not expected to have any material impact on its earnings or net assets for the financial year ending May 31, 2019 (FY19).

Shares of EcoFirst closed unchanged at 30 sen today, for a market capitalisation of RM237.93 million.