Ivory starts negotiations on payment terms

Ivory Properties Group Bhd only started to engage in negotiations with the Penang state government on the payment terms for the Bayan Mutiara project after the company secured the open competitive tender on July 25, 2011, its chairman and group chief executive officer Datuk Low Eng Hock Low said.

In clarifying the word “negotiations” which appeared in a circular pertaining to the company's EGM held in Penang yesterday, Low said:

“The reference to the word negotiations' was only conducted with the state government after the highest tender price was accepted.

“This includes incorporating due dates for the various submissions, traffic impact assessment and term of payment which had been reduced from eight years previously to five years,” he explained in a company statement after the company AGM and EGM in Penang.

At the EGM, Ivory's shareholders approved its plan to purchase and develop the 41.02ha site in Bayan Mutiara from the Penang Development Corp and Chief Minister of Penang (Incorporation).

They also gave their nod for the 45:55 joint venture with Dijaya Corp Bhd to develop the land into a mixed-use residential and commercial project to be called Penang World City.

The joint venture company, Tropicana Ivory Sdn Bhd, will undertake the development of Penang World City which will have an estimated GDV of RM10bil.

Low said Tropicana Ivory will be launching the first phase of Penang World City in the third quarter of this year. According to him, the project will be developed over six phases.

“About 80% of the development will be residential units which will comprise mainly condominiums of various sizes and the tentative price range will be between RM550 and RM700 per sq ft.

“With regard plans for the commercial precinct, we are talking to a few parties and are considering among other things an entertainment centre with facilities for water leisure activities,” he told StarBiz.

Low said under the terms spelt out in the tender document, the two compulsory items for the project were a Grade A office building and a hospital.

In Penang, Ivory executive director Murly Manokharan said the company had submitted the master plan for the entire project to the Penang Development Corp and the plan was pending approval.

He said about RM22mil or 2% had been paid as ernest deposit for the land which had a total price tag of RM1.07bil. The balance amount of RM80mil, which would be paid on or before April 10, would be generated via internal funds and bank borrowings.

The Bayan Mutiara project covers 102.56 acres, of which 67.56 acres comprise existing land while the balance 35 acres would need to be reclaimed over the next three years.

Murly said the first phase to be build on 10 acres would comprised high-rise condominiums that would have an expected GDV of around RM600mil to RM700mil.

“Under our agreement with our joint venture partner, Dijaya, Ivory has been appointed as the turnkey builder for Penang World City and thus we will be entitled to 48% on the project's gross revenue with the amount due to the company estimated at RM5bil,” Murly noted.

Meanwhile, on Ivory's plans for 2012, Low said the company was targeting to launch projects worth a GDV of RM1.4bil this year.

They are The Latitude in Mount Erskine, Penang Times Square phase three and phase four, City Mall and City Residence in Tanjung Tokong.

The company is targeting to rake in sales of some RM800mil this year.

“Last year, we only booked RM121.8mil of sales for completed and on-going projects besides having unbilled sales of RM227mil to be realised over these two years.

“We are expecting a higher sales this year since we have more projects to offer this time and not forgetting the much anticipated Penang World City development in Bayan Mutiara,” he added. - By Angie Ng and David Tan (The Star)

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