KINIBIZ Barely days after 1MDB announced the divestment of a majority stake in its 486-acre Bandar Malaysia development project, some confusion has emerged concerning the actual price tag for the 60 percent stake.

A regulatory filing by China Railway Group Ltd to the Hong Kong Stock Exchange (HKEx) made at 6.23pm, Jan 3, stated that the share sale agreement stipulates a price tag of RM5.28 billion for the 60 percent equity in Bandar Malaysia Sdn Bhd.

This is about 28 percent lower than the RM7.41 billion figure that 1MDB announced on Dec 31, 2015 for the deal.

China Railway Group, through its Malaysian arm, is a 40 percent partner in the joint venture that won the bidding for the 60 percent Bandar Malaysia stake.

It partnered Iskandar Waterfront Holdings (IWH), which is in turn a public-private partnership between Credence Resources Sdn Bhd (60 percent) and the Johor state government via state arm Kumpulan Prasarana Rakyat Johor Sdn Bhd (40 percent).

It is unclear why the amount stated to HKEx is substantially lower than the amount announced by 1MDB on Dec 31, 2015. However, it may come to a difference in wording used in respective announcements.

According to a 1MDB statement issued on Dec 31, 2015 the RM7.41 billion announced was for the joint venture’s 60 percent “share of land” in the Bandar Malaysia development project and did not explicitly attach the RM7.41 billion figure to equity in the holding company.

In contrast, the HKEx disclosure stated that the RM5.28 billion price was for “60 percent of the equity interest in Bandar Malaysia Sdn Bhd”, the holding company for the development project. For its part in the purchase, China Railway told HKEx that it will pay RM2.64 billion.

In any case, the RM7.41 billion figure for 60 percent share of land values the entire development land of Bandar Malaysia at RM12.4 billion, nearly thrice its nett book value of RM4.2 billion. This does not include sukuk debt associated with the project worth RM2.4 billion in terms of notional value at maturity, and which has accrued value of RM1.63 billion.

When contacted 1MDB president and group executive director Arul Kanda Kandasamy asked for queries to be directed to the company’s communications department as he was in a meeting. At publication time, KINIBIZ is still awaiting response to queries emailed to 1MDB. KINIBIZ is unable to immediately reach IWH and China Railway.

For the full story go to KINIBIZ .

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