Biggest abandoned housing project in M’sia to be revived

KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) will fund the builder and buyers of Malaysia’s major abandoned housing project, to be found in Bandar Baru Salak Tinggi, Sepang as part of its efforts to decide its corporate legacy accounts issue.

MBSB, which is 65.5%-owned by the Employees Provident Fund (EPF), will grant term and bridging finance facilities of up to RM215mil to builder NCT United Development Sdn Bhd (NCT), and an added RM243mil to the buyers, said MBSB CEO Datuk Ahmad Zaini Othman.

“When the new management (of MBSB) came in in 2009, we wanted to find a way on how we can resolve these legacy problems.

“And one of the ways is to support this project through NCT to revive the project.

“This project have been unresolved for more than 10 years,” Ahmad Zaini said.

“We foresee they’re (the buyers) are going to face problems to secure financing from the banks.

“So we are also putting up another package which is the end financing package to support purchasers.

“We are shifting the corporate risk from NCT to the purchasers,” he added.

Buyers will have to pay an interest rate of base financing rate minus 0.5%, which is somewhat more costly compared with conventional loans because of the fact that these borrowers are mostly in their 50s. This is according to MBSB.

MBSB is also classified as an ‘exempt finance company’ and as a result it is not restricted by any financial regulators in Malaysia.

“It is only fair and just to do so as they (these borrowers) have honoured their initial obligations but failed to receive their end of the bargain,” Ahmad Zaini said.

Following deliberations with the purchasers, an accord was arrive at  to separate them into two classes.

According to NCT, one class of buyers who desire to carry on with the purchase will have to top up another 30% to the original purchase price of either RM140,000 (for 20X70) or RM97,000 (for 18×60) units.

These units have make out a price appreciation of about 80% from the time it was abandoned.

The second group of buyers can obtain a full amount as refund for their units as construction of their units was at a minimum.

“This is a big step for us.

“Hopefully it will be a win-win situation for all,” Ahmad Zaini said at the signing ceremony here yesterday, adding that there were two more such abandoned legacy projects that were scheduled to be revived.

“NPL (non performing loans) will not go away unless and until you revive the project,” he said, adding that MBSB’s net NPL stood at 8.5% as at December 2011.

The project, named Taman Kenanga, was deserted in 1999.

The developer, Kumpulan Sepang Utama Sdn Bhd (KSUSB), is at present in liquidation.

The signing of the said  agreement yesterday  has involved three parties – MBSB, NCT and KSUSB’s liquidators, GTC Corporate Advisory Sdn Bhd.

According to MBSB, the Malaysia property housing project was abandoned by reason of the  cost overruns together with the “unfavorable economic situation then”.

It will be renamed Sepang Perdana and is likely to be completed within the span of  two years, said NCT CEO Zulfikri Saidin.

The project was originally earmarked to have 2,536 units of commercial, linked houses and low cost houses on 110 acres.