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Sale of Jerejak resort reaps RM140m profit, says PDC

 | November 11, 2016

Developer, a subsidiary of Ideal Properties Group, paid RM15.6 million deposit and will settle remaining sum over a period of eight years, says PDC general manager.

rosli

GEORGE TOWN: Penang Development Corporation (PDC) today announced it sold its 49 per cent stake in a Jerejak island resort company to a developer for a profit of RM140.6 million.

PDC General Manager Rosli Jaafar said the state-linked company’s shares in Tropical Island Resort Sdn Bhd (TIR) were sold to Q Islands Development Sdn Bhd (QID), which is a subsidiary of Penang-based developer, Ideal Properties Group.

“With this equity sale for RM156 million, PDC will recover its cost of investment of RM15.44 million, together with the shareholders’ loan and interest of RM4.4 million which has also been paid by Ideal (via QID).

“QID paid a RM15.6 million deposit and will settle the remaining sum over a period of eight years. In other words, PDC will receive a total of RM160.4 million,” Rosli said in a statement released today.

TIR used to be a joint-venture company between PDC and the Urban Development Authority (UDA), with the Federal agency having the majority 51 per cent.

Rosli said one of the conditions imposed in the sale of PDC shares was to recover principal and interests from a RM3.4 million loan given to TIR in December 2007.

Meanwhile, TIR recently announced that it has teamed up with Ideal Properties, to redevelop an existing resort and 32 hectares (ha) of land on the island, which is located between Penang island and the mainland.

The redevelopment plan comprises a bridge linking Pulau Jerejak to the main Penang island, 1,200 homes, a marina, hotels, a theme park, a 11.5km round-the island cycling track and related infrastructure to promote tourism in the state.

TIR said the resort, which has been closed since May, had reportedly sustained “heavy losses” since it began in 2004.

On the proposed redevelopment, Rosli said TIR and QID have submitted their plans to the local authorities, adding that the state government “intends” to gazette 295ha of 359ha of the island as a forest reserve.

“The state government had approved UDA’s proposals on condition that environmental safeguards are in place and comply with Environment Impact Assessment(EIA) requirements.

The PDC statement comes in the wake of comments by Penang Gerakan Acting Youth Chief Jason Loo today, who questioned PDC for not making public on how the shares were disposed.

“Why were the shares in the Jerejak island resort sold off quietly?” Loo said, after the controlling shareholder of the resort (UDA) announced it was now collaborating with a private developer.

Loo also questioned if PDC had sold their shares via an open tender as per state government norms or through a direct deal.

RELATED STORY:

Gerakan: Penang must explain sale of Jerejak island resort


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