Is JCorp getting best value in selling Pusat Damansara for RM500mil?

EARLY this week, Malton Bhd said it was proceeding with the previously-stalled deal to acquire Pusat Bandar Damansara (PBD) from Johor Corp (JCorp).
The
entire deal involves Malton-linked companies paying JCorp-linked
companies a total of RM500mil in cash, plus allocating a certain amount
of office space in the redeveloped PBD to JCorp as well as giving JCorp
a 20-storey commercial building in Petaling Jaya known as V Square.
What
is odd, though, is that the announcement made no mention of a legal
battle between the two parties in relation to this deal.
The
matter has gone to the courts, with Malton-related entities seeking to
enforce a 2009 agreement, whereby JCorp had supposedly agreed to sell
them PBD for RM700mil.
It has been reported that the court
documents of that case indicated that things didn't go according to
plan, and that subsequently, the parties involved had executed
supplemental agreements to amend certain clauses in the joint-venture
agreement.
The plaintiffs had claimed that they were ready and willing to execute the sale agreement, but the defendants refuted this.
It
has also been reported that JCorp was rethinking the sale of PBD to the
Malton-linked companies because the value of PBD was seemingly higher
than the sale price, considering that it is in an area earmarked as one
of the proposed mass rapid transit (MRT) key stations.
The PBD office complex may be old, but it is also strategically located in the affluent neighbourhood of Damansara Heights.
Last year, the case drew some attention as some big-name lawyers became involved, with Tan Sri Cecil Abraham being part of the team fighting for the companies linked to Malton while Tommy Thomas represented parties linked to JCorp.
Considering
this, and with Malton seemingly proceeding with the deal, the question
that begs to be answered is whether JCorp is getting best value for its
prime PBD asset?
Interestingly, the announcement by Malton on Monday came barely a week after the general election that saw the exit of Tan Sri Abdul Ghani Othman as Johor's Menteri Besar (MB).
By
virtue of being MB, Abdul Ghani was also the head of JCorp and it was
during his tenure at JCorp that the PBD legal case with the
Malton-related companies arose.
JCorp, which at one point was
crumbling under the weight of debt, has since undergone some severe
strategic restructurings that took a lot of time, effort and expertise.
It has managed to stay afloat while keeping its prized assets such as KFC Holdings Bhd and New Britain Palm Oil Ltd.
It should continue the good work of fixing itself by ensuring that it gets best value for PBD.
Business news editor Risen Jayaseelan would like to see a report on the latest independent valuation on Pusat Bandar Damansar