Metronic Global cancels JV to develop RM80 mil mixed project after agreement lapsed

KUALA LUMPUR (March 23): Metronic Global Bhd has terminated its joint venture (JV) with Northern Paradise Sdn Bhd to build a mixed development project with an estimated gross development value of RM80 million, after their agreement lapsed.

In a stock exchange filing yesterday, Metronic said the JV agreement, dated Nov 15, 2013, lapsed after the parties failed to procure the necessary approvals and consents from the relevant authorities within the period provided in the agreement. The slowdown in the property market was also cited as a factor.

"Furthermore, the licence to develop the said development project could not be obtained on time," it added.

The JV agreement was inked between Metronic's wholly-owned unit M One Country Development Sdn Bhd (MOCD) and Northern Paradise, the owner of several plots of leasehold lands measuring 0.2ha in southern Kuala Lumpur, on which the development was supposed be located.

The termination was mutually agreed on and an agreement to effect that was inked on March 17, said Metronic, following which both companies inked a sale and purchase agreement for Metronic to buy the lands directly at RM7.8 million.

The purchase, to be partly funded by the RM6.4 million it had paid Northern Paradise for the JV, is expected to be completed on July 20.

However, as Northern Paradise is in the process of being struck off by Companies Commission of Malaysia, Metronic said MOCD had lodged a caveat to secure and protect its interest in the land.

Metronic closed unchanged yesterday at 7.5 sen for a market capitalisation of RM56.88 million. — theedgemarkets.com

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