Profit Consortium wants Plaza Rakyat

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Ahmad Phesal (second from right) and Perbadanan Pembangunan Kampung Baru deputy chairman Datuk Seri Matshah Safuan (second from left) launching the ‘Jalan-Jalan Kampung Baru’ official guided tours yesterday. Photo by Shahrin Yahya

KUALA LUMPUR: The Kuala Lumpur City Hall (DBKL) said Profit Consortium Sdn Bhd, a privately held company linked to Major (R) Anuar Adam who controls Tadmax Corp Bhd, has submitted a proposal to revive the long abandoned Plaza Rakyat project in Jalan Pudu here.

Kuala Lumpur Mayor Datuk Ahmad Phesal Talib said DBKL had discussed the proposal with the Ministry of Federal Territories and Urban Wellbeing and would consider Profit Consortium’s proposal to take over the project.

However, Profit Consortium still has to conduct its own due diligence on the project to assess the viability of the investment, he said.

“Yes, that was the earlier suggestion (Profit Consortium being a white knight in the Plaza Rakyat project). However, we will have to look at their proposal first,” Ahmad Phesal told a news conference after launching the “Jalan-Jalan Kampung Baru” official guided tours here yesterday.

“If we find that the proposal doesn’t meet our requirements, then we might not finalise the deal with them,” he said.

The proposal comes after Ivory Properties Group Bhd terminated the acquisition and rehabilitation agreement (ARA) entered into with AdamPrimus Chartered Accountants, the receiver and manager of Plaza Rakyat Sdn Bhd (PRSB), to revive the project. Ivory Properties and AdamPrimus could not come to an agreement to extend the conditions of the precedent period of the ARA, which lapsed on June 30, 2014.

On July 7, the arbitration court ruled that DBKL had the right to repossess the Plaza Rakyat site.

However, the arbitrator ordered DBKL to pay RM145 million to a group of lenders led by RHB Bank Bhd for loans taken by PRSB, as well as RM100 million to the company itself as a reimbursement for terminating the joint-venture agreement (JVA).

It was reported that DBKL disagreed to pay the RM100 million to PRSB and was trying to negotiate with the lenders for a lower amount.

On this, Ahmad Phesal said DBKL is currently negotiating with the Department of Insolvency Malaysia to get its advice on whether it has to reimburse PRSB for terminating the JVA.

“The arbitrator had ruled that we (DBKL) have to pay the lenders RM145 million and PRSB RM100 million. However, the RM30 million of this amount is made up of arrears such as land premium, taxes and quit rents. So, we are discussing with the Insolvency Department how to settle the RM70 million part,” said Ahmad Phesal.

On another matter, he said DBKL is still awaiting a new proposal from Themed Attraction Resorts Sdn Bhd, a subsidiary of Khazanah Nasional Bhd, on the development of the Malaysian Truly Asia Centre (MTAC) here, which was planned to be part of the government’s Economic Transformation Programme.

“Until now, we are still waiting for suggestions [from Themed Attraction Resorts] on whether to refine or to amend the original plan. It is confirmed that the previous plan will not proceed. But now, I don’t know what the progress is on the new plan,” Ahmad Phesal said.

He reiterated that the government had opined that MTAC’s plans were too “comprehensive” and did not incorporate the surrounding green area into the development.

Ahmad Phesal said the original plan for the proposed project involved a theme park, a restaurant and a gallery.

The MTAC project is slated to begin construction by year-end and to be completed by 2016.


This article first appeared in The Edge Financial Daily, on October 14, 2014.