KUALA LUMPUR (Jan 18): Sime Darby Bhd today confirmed that the conglomerate and two other property groups, SP Setia Bhd and I&P Group Sdn Bhd, have aborted their plans to jointly develop an affordable housing project in Indonesia worth 11.29 billion rupiah (RM3.5 billion).

Sime Darby said the Malaysian companies have decided not to pursue the joint venture with PT Hanson International Tbk, and are exercising the right to terminate the Memorandum of Understanding  entered into by the parties.

The termination does not have a material financial effect on the companies, it said in a filing with Bursa Nalaysia today. Yesterday, SP Setia made a similar announcement.

Both Sime Darby and SP Setia have declined to comment on the reason for the termination when contacted.

The MoU was signed in August last year to jointly develop about 500 hectares of land in Maja, Tangerang. Under the deal, the Malaysian companies would have an equity interest of 20% each while PT Hanson would hold the remaining 40%.

PT Hanson is one of Indonesia’s largest property developers by landbank, owning more than 3,500 ha of land in greater Jakarta. The proposed project was next to an existing township called Citra Maja Raya, which started development in 2015.

Maja is located to the west of Jakarta and it is near industrial areas in the Banten province where there are about 400,000 people working in 1,500 factories. It is about 90 minutes from central Jakarta by train.

As of the 3.20pm, Sime Darby’s share price was 0.47% higher at RM8.53 while SP Setia was up 0.62% at RM3.23. — theedgemarkets.com

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