By Khairie Hisyam
Ailing 1Malaysia Development Berhad (1MDB) has received two “final, binding and fully funded” bids for a majority stake in its 486-acre Bandar Malaysia development, its transaction advisor CH Williams Talhar and Wong (WTW) said today.
In a statement, WTW said the final binding bids “fully reflect” the expectations of 1MDB in terms of land valuation, payment terms and certainty of transaction.
“WTW and 1MDB Real Estate Sdn Bhd, the master developer of Bandar Malaysia, are currently seeking clarification and undertaking a comprehensive analysis of the two bids. A recommendation will then be made to the 1MDB Board,” said WTW.
1MDB Real Estate is confident that a winning bid will be selected, followed by the execution of a definitive agreement, by year-end, said WTW further.
The announcement follows a previous statement by 1MDB president and group executive director Arul Kanda on Oct 31, 2015 that the self-styled strategic development company is expecting offers by mid-November for the proposed equity sale.
Speaking to assembled journalists, Arul said the company had at the time shortlisted four potential bidders and expected three offers.
Arul Kanda
“We have had close to 40 parties expressing interest to become our development partner,” said Arul in respect of the Bandar Malaysia project. “We will sell at least 60% of our equity.”
It is unclear whether the two final bids were submitted by local or foreign parties. 1MDB did not disclose their identities.
On Oct 31, Arul said of the three offers expected by 1MDB, two are from foreign consortiums while one is likely from a local entity.
The Bandar Malaysia development, just under 4km away from the Petronas Twin Towers, is envisioned to be a mixed-use development on the site of the old airport at Sungai Besi.
It was previously reported to have as much as RM40 billion in gross development value, boasting green infrastructure, sustainable housing and a range of commercial and lifestyle facilities, according to 1MDB’s website, which added that the project intends to be “the yardstick for sustainable urban housing within Malaysia”.
The proposed disposal of a majority stake in the project is in turn part of 1MDB’s strategic review of its business operations first announced in February this year. The plan came as the company struggles to deal with its debt commitments of some RM42 billion.
Other measures include the proposed sale of its energy assets held under Edra Global Energy, which is valued at some RM12 billion not including debt attached to the assets according to 1MDB’s books.
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