MRCB sees no material financial impact from LRT3 funding dispute with George Kent

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KUALA LUMPUR (Aug 14): Malaysian Resources Corp Bhd says it expects no material financial or operational impact from the arbitration that George Kent (Malaysia) Bhd has initiated, over a dispute between the parties over financing options for their joint venture company that is undertaking the construction of the Light Rail Transit Line 3 (LRT3).

In a stock exchange filing today, the group said "none of its directors or substantial shareholders or persons connected to them, has any interest, direct or indirect, in the aforesaid arbitration proceedings".

MRCB's largest shareholder is the Employees Provident Fund, with a 35.95% stake held as at March 22, followed by Gapurna Sdn Bhd, which is controlled by Tan Sri Mohamad Salim Fateh Din, who stepped down from all posts he held in the group in June last year, with a 15.57% stake as at June 19. 

Yesterday (Aug 13), George Kent announced it had served a notice of arbitration on MRCB, in the wake of the dispute involving the JV company, MRCB George Kent Sdn Bhd, which the group and MRCB had formed in 2015 on a 50:50 basis to undertake the LRT3 project.

George Kent said this was due to a difference of opinion with MRCB, in the interpretation of certain provisions of their shareholders' agreement in relation to the options for securing financing for the JV company, which Prasarana Malaysia Bhd had appointed as project delivery partner in 2015. 

MRCB shares slipped 2.5 sen or 2.89% to close at 84 sen today, for a market capitalisation of RM3.71 billion. George Kent, on the other hand, closed 1 sen or 0.93% lower at RM1.06, giving it a market value of RM570.93 million.