KUALA LUMPUR: IWH CREC Sdn Bhd will receive a refund of RM1.54bil from the Ministry of Finance (MoF) following the termination of the deal for the former to buy a stake in the Bandar Malaysia project, UOB Kay Hian Malaysia Research said.

       “It is understood that IWH CREC will receive a refund of RM1.54b from the MoF following the termination — the total sum that the JV has paid on a staggered basis,” it said in a report on Thursday.

       Both parties mutually agreed to terminate the deal for the latter to buy a 60% stake in the Bandar Malaysia project that is located in the former air force base near Sungai Besi, southern Kuala Lumpur, for RM7.4bil.

       The termination came after both parties agreed not to extend the conditions precedent period of the agreement, according to the joint statement issued by the Ministry of Finance’s wholly-owned TRX City Sdn Bhd and IWC CREC.

       The agreement lapsed on May 6 this year, as the respective parties failed to meet the conditions precedent within the stipulated period.

       UOB Kay Hian Research described the cancelled project as another setback for the sector.

       “Since the termination of the high-speed rail project, the sustainability of the development is uncertain given its high reliability on foreign investment, while the Covid-19 pandemic further exacerbated the situation.

       “The news is negative to the sector in general. While TRX City remains committed to realising the Bandar Malaysia vision, the timeline of the development rollout now is being pushed back once again.

       “We make no changes to our market weigtht recommendation for the sector,” it said.