PETALING JAYA (March 30): Eastern & Oriental Bhd (E&O) and Kumpulan Wang Persaraan (Diperbadankan) (KWAP) will jointly develop Seri Tanjung Pinang Phase 2A (STP2A) in Penang.
E&O said in a statement today that its subsidiary Tanjung Pinang Development Sdn Bhd (TPD) has sealed a partnership with KWAP to facilitate the collaboration.
TPD has entered into a conditional sale and purchase agreement (SPA) with KWAP to dispose of 20% of the STP2A development land measuring 11.445 million sq ft to KWAP for a cash consideration of RM766,022,310.42.
At the same time, TPD has also entered into a conditional joint-venture agreement with KWAP to develop the entire STP2A development land via a special purpose vehicle — Persada Mentari Sdn Bhd, which will be 80%-owned by TPD and 20% by KWAP.
STP2A is the first phase of the 760-acre Seri Tanjung Pinang Phase 2 reclamation project on the northeast coast of Penang island, for which TPD has been granted the Concession Rights to reclaim and develop. STP2A has a total gross area of approximately 250 acres.
“We are deeply honoured to partner KWAP, a highly-valued and reputable institution, in our journey to transform the concept of STP2A into reality. The joint-venture will be on a solid platform to realise the potential of the project and bring it to fruition,” said E&O managing director Kok Tuck Cheong (pictured).
Kok added that the proceeds from the proposed transaction will be utilised towards reclamation and infrastructure costs, working capital and/or the repayment of borrowings for the project.
Commenting on the investment, KWAP CEO Datuk Wan Kamaruzaman Wan Ahmad said: “Entering into this partnership with E&O is an exciting journey and inaugurates our first equity participation into property development for KWAP. E&O’s record of accomplishment in the industry as well as the quality of their delivery will assure the success of this project.”
Having obtained the necessary approvals for commencement of works, reclamation works for STP2A started in early 2016 and are in progress. Pursuant to the terms of the reclamation contract, these works are due to be completed within the second half of 2018, barring any unforeseen circumstances.