River Retreat Sdn Bhd (“RRSB”), an indirect subsidiary of Iskandar Investment Berhad, had on 15 December 2019, entered into a sale and purchase agreement (“SPA”) with Melia Spring Sdn Bhd (“Melia Spring”), a subsidiary of Eco World Development Group Berhad (“EcoWorld”), for the sale and purchase of 200 acres of land located in Iskandar Puteri, Johor.
According to EcoWorld, the land is proposed to be developed into a mixed residential and commercial township development with a preliminary estimated gross development value of RM1.67 billion. A large component of the development is expected to comprise products suitable for first time home buyers and the M40 target group.
The purchase price totalling RM343,047,196.80 comprised a base price and indicative interest costs to be paid by Melia Spring over a 7-year period. It is a condition of the SPA that Melia Spring will procure a bank guarantee in favour of RRSB to secure the payment of the balance of the base price of RM298,821,600 by Melia Spring. Further, EcoWorld will issue a corporate guarantee in favour of RRSB to guarantee the payment of the interest costs.
The SPA is conditional upon the fulfilment of certain conditions precedent to be satisfied within a 9-month period or such further period to be mutually agreed between the parties.