The Star, 11 August 2014 - Tropicana, Selangor amend terms of land sale

Star Property On-line, 11 August 2014

PETALING JAYA: Tropicana Corporation Bhd and the Selangor state government had entered into a supplementary agreement to amend and incorporate additional terms and conditions with regards to the sale of a piece of land in the vicinity of Kota Kemuning previously known as the Canal City.

Among the salient points of the amendments are that the state will receive accelerated payment amounting to RM173mil instead of RM85mil for a portion of the land that Tropicana had sub-sold to Prominent Stream Sdn Bhd, a subsidiary of Eco World Development Group Bhd.

According to a statement by Tropicana last Friday, the other matter in the amended agreement is that the Menteri Besar Selangor (Pemerbadanan) (MBI) has appointed Permodalan Negeri Selangor Bhd (PNSB) as the agent and project manager to manage its interest subsequent to the new agreement.

The deal between Tropicana and the state can be traced to April 15, 2013 when the property developer’s subsidiary, Sapphire Index Sdn Bhd (SISB), acquired 1,172 acres of leasehold land in what was previously known as Canal City for close to RM1.3bil.

The bulk of the amount is to be paid over 20 years as Tropicana develops the land.

In March this year, the embattled Selangor Mentri Besar Tan Sri Khalid Ibrahim had a change of mind after SISB sold a portion of the land, measuring 308.72 acres to Prominent Stream Sdn Bhd (PSSB) for RM470.7mil cash.

Subsequently, in April, MBI has made fresh offer to Tropicana to pay up-front RM844.3mil, a valuation derived on a net present value basis, compared with RM1.3bil previously.

In the latest development, Tropicana said that the accelerated payment was with regards to the sub-sale of the parcels sold to PSSB on the basis of developable area instead of gross land area.

“The accelerated payment amounts to RM173mil instead of RM85mil. As a result, there will be a waiver in interest for the amount paid,” it said.