The Star online reported that Iskandar Waterfront City Bhd’s (IWCity) unit Tebrau Bay Sdn Bhd (TBSB) will end up with an additional 107.2 acres in Plentong, Johor Bahru, under a land exchange deal struck with the Johor state government.
However, TBSB will also have to fork out RM309.12mil, to be satisfied partly in cash and partly by absorbing the cost of a construction job to be done for the state government.
IWCity said under the alienation cum development agreement, the Johor government would compulsorily acquire 121.58 acres of freehold agricultural land from TBSB for a total compensation sum of RM222.8mil.
In consideration of TBSB’s irrevocable agreement to the compulsory acquisition, the state government would alienate 228.78 acres, also in Plentong, to TBSB for RM531.92mil.
These alienated lands, which are adjoining TBSB’s existing coastal land in Plentong, will require reclamation as they are completely submerged.
TBSB will have to settle the RM309.12mil difference between the compensation for TSSB land and the cost of the alienated land in cash and kind.
Among others, it will be required to build 570 residential units and nine shoplots on the state-acquired land for the Johor government at its own cost (RM189.12mil construction cost plus ancillary costs of RM9.94mil).
It will also pay RM100mil in cash as the premium imposed by the relevant state authority for the land alienation, and pay RM10mil in cash to Johor state government’s unit Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ).
(KPRJ is also a substantial shareholder of IWCity, with a 6.4% direct stake and 37.8% indirect.)
The RM10mil cash payment will be used to build a multi-purpose hall in Bandar Baru Permas Jaya, Johor Bahru.
IWCity had recently sealed a merger agreement with Iskandar Waterfront Holdings Sdn Bhd (IWH) and IWCity’s two other substantial shareholders, Credence Resources Sdn Bhd and Johor state government investment arm, Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ).