PDC says getting RM156m for Pulau Jerejak shares

GEORGE TOWN, Nov 11 — The Penang Development Corporation (PDC) sold off its 49 per cent stakes in Tropical Island Resort Sdn Bhd (TIRSB) for RM156 million, said its general manager Datuk Rosli Jaafar.

He said PDC accepted UDA Holding's offer as it meant a profit of RM140.6 million after deducting the costs of investment and loan to TIRSB.

“In 1997, TIRSB was set up by both the BN (Barisan Nasional) federal and state government with a paid-up capital of RM31.5 million.

“PDC had injected RM15.44 million into TIRSB for a 49 per cent share whilst UDA contributed RM16.07 million for a 51 per cent share,” he said in a statement issued today.

On top of the initial investment, Rosli said PDC also loaned RM3.4 million to TIRSB on 28 December 2007 at an interest rate of 3.5 per cent per annum. The loan principal and interest had increased to RM4.4 million by 2016.

“One of the conditions for accepting UDA’s offer is that the RM4.4 million loan must be settled separately from the sale of the 49 per cent shares and UDA agreed so the loan was fully paid on April 2016,” he said.

Rosli said the previous BN state government had approved the award of the 80 acres of lease land land for 60 years, which expires in 2062, in Pulau Jerejak to TIRSB at RM12.95 million back.

He claimed that, at that time in 2001, the market value was RM47.6 million so the previous administration had sold the land to TIRB at 27 per cent of the market price.

“The land title was transferred to TIRSB by the then BN state government even before the land premium of RM12.95 million had been fully paid,” he said.

Though PDC had sold its shares to Ideal Property, Rosli said UDA will have 100 per cent control of TIRSB upon completion of the Novation Agreement.

“UDA had brought in Ideal to jointly developed their project and also buy out PDC’s 49 per cent stake in accordance with PDC’s conditions,” he said.

“Only when these conditions protecting PDC’s interests were fulfilled, the shares sale agreement with Ideal’s subsidiary company, Q Islands Development Sdn Bhd (Q Islands) was signed this year,” he added.

Rosli said PDC has already received the 10 per cent deposit of RM15.6 million and subsequent payments will be made over a period of eight years so PDC shares will only be transferred after full payment is made in 2024.

He said TIRSB has been incurring heavy operating losses since it commenced operations of Jerejak Rainforest Resort & Spa (JRRS) in 2004.

The resort have now closed its operations from May 2016 due to accumulated losses amounting to RM 40 million as at end of 2015.

He also confirmed that UDA had submitted their development plans for the 80 acres of land on Pulau Jerejak and that the state had approved the proposals on condition that environmental safeguards are in place and comply with Environment Impact Assessment requirements.

Rosli said the redevelopment will comprise 1,200 units of residential development, a marina, four- and five-star hotels, theme park, an 11.5km round island cycling track and related infrastructure to promote tourism in the state.

“The state government intends to gazette the remaining few hundred acres on the island as forest reserves,” he said, adding that the proposed bridge linking to Pulau Jerejak will not allow cars and vehicles to cross to the small island.