Work on the long-abandoned Plaza Rakyat project in Jalan Pudu, Kuala Lumpur is expected to begin soon, A 43% stake in the developer – Profit Consortium Sdn Bhd is being bought by China-based Guangzhou Xu Zhuo Enterprise Management Co Ltd, who are expected to pay the outstanding debt due to Kuala Lumpur City Hall (DBKL)
“The Plaza Rakyat project is being taken over by a new consortium, which finalised its takeover at end-March. It has also contacted DBKL (to) pay the amount outstanding (by Profit Consortium) and is expected to start work soon,” Minister of Federal Territories Khalid Abdul Samad said, speaking to The Edge.
The stake in Profit Consortium is being sold for RMB4 million (RM2.4 million) from Singapore-listed Debao Property Development Ltd Profit Consortium, which had problems in funding the project.
Profit Consortium bought the partially completed Plaza Rakyat project in 2015. Comprising five parcels of leasehold land totalling 29.64 acres, it was purchased from DBKL for RM700 million, much of which remains unpaid.
The publication reports that in an announcement to the Singapore Stock Exchange (SGX) on April 29, Debao said that as at Feb 21, Profit Consortium had paid DBKL the first instalment of RM70 million, part of the second instalment amounting to RM20 million, which was due on March 31 (from the total amount due of RM140 million) and late payment interest of RM11.31 million.
“The third, fourth and fifth instalments of RM150 million, RM150 million and RM190 million respectively, are payable after the building plan has been obtained,” Debao says, adding that Profit Consortium also owes pensioners RM7.36 million under a government contract.
Khalid says that Profit Consortium has also paid RM70 million of the RM140 million due from the second instalment. “It has already paid half (of the RM140 million) and the balance will be paid by the end of this month,” he is quoted as saying.
Guangzhou Xu Zhuo, as part of the deal. will loan RMB136 million to Profit Consortium as working capital for the repayment of the company’s accounts payable.
The publication cites the Companies Commission of Malaysia (SSM) website, which shows Profit Consortium’s total liabilities for the financial year ended Dec 31, 2017 (FY2017) stood at RM129.1 million, all of which were current.
In 2017, the development plan for Plaza Rakyat had been finalised, and repair works to the existing development on the land had commenced, but work was halted due to cash flow difficulties to fund working capital requirements.
The project is a large-scale mixed-use development that includes high-quality residential units, a five-star hotel, a budget hotel, offices and a large-scale shopping mall. A 96-storey skyscraper and two 81-storey towers is revealed in an earlier development proposal submitted to DBKL.