2 days ago
- Business
- New Straits Times
Gadang, Cyberview end decade-long JV, cite regulatory impasse
KUALA LUMPUR: Gadang Holdings Bhd has mutually agreed to terminate a joint development agreement (JDA) with Cyberview Sdn Bhd, effectively ending a decade-long collaboration to develop a 49.17-hectare site in Cyberjaya.
The decision follows a failure to secure planning approval for a revised final phase of the project, the group said in a filing to Bursa Malaysia today.
The JDA, initially signed on May 23, 2014, involved Gadang's indirect subsidiary Hillstrand Development Sdn Bhd, with Cyberview's unit CSB Land Sdn Bhd joining the agreement in 2016.
The development kicked off with Phase 1 in 2015 and has since seen the completion of Phases 1A through 3C. Phase 3D is on track for completion by December this year, but Phase 4, consisting of sub-phases 4A, 4B and 4C, remains undeveloped.
Gadang said the proposed revision of Phase 4C, from commercial shop lots to serviced apartments, was key to unlocking an additional RM25 million in returns, a proposal Hillstrand Development supported, pending regulatory approval.
"Despite multiple rounds of discussions and negotiations, the parties were unable to obtain the required regulatory approvals, particularly for Phase 4C," the group said, adding that all parties subsequently agreed to terminate the JDA.
Hillstrand Development has incurred about RM40 million in development costs related to Phase 4. Under the terms of the termination, Cyberview and CSB Land have agreed to pay RM21 million as their portion of the shared common costs.
Gadang said it would make a provision of about RM19 million for additional costs in its financial year ended May 31, 2025. This will be reflected in its fourth-quarter financial results, expected to be announced in July.
The company added that the formal mutual termination agreement is expected to be completed in the fourth quarter of 2025.
