06 August 2014

Ivory Properties walks away from plan to redevelop Plaza Rakyat

  06 August 2014


PETALING JAYA: Ivory Properties Group Bhd is walking away from a deal to redevelop the long-abandoned Plaza Rakyat in Kuala Lumpur after it failed to agree on the terms with the project’s receiver and manager.

It said in a filing with Bursa Malaysia that its unit, Ivory Place Sdn Bhd, and Plaza Rakyat Sdn Bhd (PRSB) could not come to an agreement following their discussion to extend the conditions precedent period of the acquisition and rehabilitation agreement (ARA).

“Accordingly, the ARA has been terminated, both Ivory Place Sdn Bhd and PRSB have acknowledged and will observe the terms and conditions therein to come to a satisfactory conclusion arising from the termination of the ARA,” the Penang-based property firm added.

Group chief executive officer Datuk Low Eng Hock told StarBiz early last month that Ivory was intent on seeking an amicable solution to the troubled Plaza Rakyat along Jalan Pudu even though Kuala Lumpur City Hall (DBKL) had other plans for the project.

Ivory had won the rights to revive the project after a tender exercise conducted by PRSB in September last year.

It had proposed a mixed-use development comprising a shopping mall, serviced residences and hotels with a gross development value of RM8bil.

But Kuala Lumpur mayor Datuk Seri Ahmad Phesal Talib said in June that DBKL did not recognise the appointment of Ivory as the new developer of Plaza Rakyat.

It was reported that DBKL was awaiting the completion of arbitration proceedings between it and PRSB and was set to reclaim possession of the site following the green light from the arbitrator.

The original plan for Plaza Rakyat had comprised a 79-storey office tower, 46-storey condominium, 24-storey hotel and seven-storey shopping centre.

The RM1.4bil project was 30% completed about 15 years ago when the developer, PRSB, ran into financial difficulties during the 1997/1998 Asian financial crisis that forced them to abandon the project.

The Government decided to terminate PRSB’s contract in 2010, 12 years after the company gave up on Plaza Rakyat.

Subsequently, PRSB went into receivership and came under the administration of a consortium of lender banks.

~ By THE STAR


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