(Updated)

MRCB gets RM2.3m final award on costs in LRT3 project funding dispute with George Kent

MRCB gets RM2.3m final award on costs in LRT3 project funding dispute with George Kent
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KUALA LUMPUR (Sept 27): Malaysian Resources Corp Bhd (MRCB) has on Friday received the final award on costs from the Asian International Arbitration Centre (AIAC), which mediated in the MRCB-George Kent (M) Bhd (MRCBGK) dispute involving both companies' shareholders’ agreement dated June 8, 2015.

In the final award on costs, the arbitrator has ruled that George Kent (Malaysia) Bhd will pay MRCB RM2.08 million, plus S$70,458.50 (about RM217,935), MRCB said in a filing with Bursa Malaysia on Monday.

The shareholders’ agreement relates to MRCBGK, a 50:50 joint venture (JV) between the two listed companies, which is the project delivery partner for the RM11.4 billion Light Rail Transit 3 (LRT 3) project linking Bandar Utama to Klang, Selangor.

The award to MRCB follows the AIAC arbitration’s findings that George Kent was found to have been in breach of the shareholders’ agreement with MRCB.

MRCB must now make an unconditional cash offer to buy all of George Kent shares in the JV company and unconditionally offer to sell all of its shares in the JV company to George Kent at the same price, according to past filings.

This is unless the two parties settle their dispute or if MRCB withdraws its notice concerning the shareholder agreement breach.

The arbitration followed a dispute over the options for securing financing requirements for the JV company, after which George Kent served the notice of arbitration to MRCB in August 2019.

George Kent and MRCB had entered into the shareholders’ agreement on June 8, 2015 to form the JV company.

At 3.01pm, shares of MRCB were up 0.5 sen or 1.3% at 39 sen, giving it a market capitalisation of RM1.72 billion. George Kent shares were unchanged at 67.5 sen, valuing the group at RM374.62 million.

Read also:
George Kent found to have breached shareholders’ agreement concerning LRT 3 JVCo with MRCB

Kang Siew Li