KSK Land refutes claim of financial stress

This article first appeared in The Edge Malaysia Weekly, on June 27, 2022 - July 03, 2022.
KSK Land’s 8 Conlay project. (Photo by Mohd Izwan Mohd Nazam/The Edge)

KSK Land’s 8 Conlay project. (Photo by Mohd Izwan Mohd Nazam/The Edge)

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DEVELOPER KSK Land Sdn Bhd has denied talk that its 8 Conlay project, a RM5.4 billion mixed-use development featuring the world’s tallest “twisted” twin tower residence in the heart of Kuala Lumpur, is facing financial difficulties.

To questions from The Edge, KSK Land managing director Joanne Kua said: “No, we have not missed or defaulted on loan repayments.”

In an email response, she said the development continues to show steady progress. “KSK Land remains financially strong with sufficient resources to ensure the completion of the 8 Conlay project. We are now, in fact, looking forward to the increased interest in our project from investors from various markets with the reopening of international borders,” Kua, who is also the CEO of KSK Group, said.

Kua was responding to queries from The Edge on the status of the group’s iconic project. According to sources, KSK Land — a wholly-owned subsidiary of privately-held KSK Group Bhd (formerly known as Kurnia Asia Bhd) — had come into financial stress and missed on loan repayments.

8 Conlay features two towers of branded residences (Tower A and Tower B) designed with an eye-catching tilt; a five-star luxury hotel The Kempinski Hotel Kuala Lumpur (Tower C); and a lifestyle retail podium. The branded residences are known as YOO8 serviced by Kempinski.

Asked about potential delays to the project, Kua said: “In line with industry-wide post-Covid-19 pandemic realities, we are not exempted from supply chain challenges, but they do remain within manageable limits. We continue to make steady progress towards the completion of 8 Conlay, first and foremost, with our two residential towers YOO8 serviced by Kempinski.”

She went on to say that YOO8 Tower A would be ready by early 2023 and YOO8 Tower B, by the end of 2023.

Prior to the pandemic, the 8 Conlay project had been targeted for completion by late 2020.

On Nov 18 last year, KSK Land marked the structural completion of Tower A. At the time, Kua told reporters that she anticipated Tower A to be handed over by end-2022, Tower B to completed by mid-2023, the Kempinski hotel by end-2023 and the retail podium by early 2023.

At that point, Tower A and Tower B were 80% and 40% taken up, respectively. Tower A is to have 68 floors while Tower B and C will have 57 and 72 floors, respectively. It was reported that the prices of the branded residences range from an average of RM3,395 psf for Tower A to RM3,370 psf for Tower B.

In December 2020, KSK Land had obtained a RM650 million syndicated facility from Malayan Banking Bhd and Bank Pembangunan Malaysia Bhd for the completion of Tower C.

Set up in 2013, KSK Land is the property arm of KSK Group, an investment holding company which is also in the insurance business in Indonesia and Thailand.

KSK Group is 90%-owned by Kua’s father, Tan Sri Kua Sian Kooi, who is the executive chairman. The older Kua is well known in business circles as the founder of Kurnia Insurans.

In September 2012, his KSK Group sold Kurnia Insurans (Malaysia) Bhd to AmG Insurance Bhd for RM1.63 billion. KSK Group, however, kept its general insurance businesses in Indonesia and Thailand, rebranding them as KSK Insurance.

KSK Group was delisted on Nov 7, 2013, after major shareholders privatised the company via a selective capital reduction and repayment exercise. In 2017, it launched its first full-stack insurtech group, Sunday, in Thailand.

A company search on CTOS showed that KSK Group posted a higher net profit of RM129.44 million in the financial year ended Dec 31, 2020 (FY2020) compared with just RM4.74 million in the year earlier. This was achieved despite revenue falling 29.3% to RM261.69 million, from RM370.34 million in FY2019. The group had made a net loss of RM56.51 million in FY2018.

Meanwhile, KSK Land registered a wider net loss of about RM20,000 in FY2020 compared with RM12,200 in the year earlier.

 

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