KUALA LUMPUR (Aug 2): Ivory Properties Group Bhd has teamed up with ECK Development Sdn Bhd to jointly develop residential components at AirportCity and Aerotropolis in Kedah.
In a bourse filing, the Penang-based property developer said it has entered into a binding term sheet with ECK for the venture on a land measuring 135 acres.
ECK has in principal been appointed by the Kedah state government as an investor and to be involved in the proposed development of Kulim International Airport (KXP), AirportCity and Aerotropolis in Sidam Kiri in Kedah’s Kuala Muda district.
The entire project is to be developed via a special purpose vehicle (SPV) to be formed between KXP AirportCity Holdings (KXPACH) and ECK, subject to the process of due diligence by KXPACH on ECK.
Ivory Properties said one of the conditions imposed for compliance by ECK is the provision of a performance bond by a bank, or alternately, a corporate guarantee by a public-listed company, for an amount not exceeding RM1 billion to KXPACH.
Against this backdrop, Ivory Properties has agreed at the request of ECK to issue a corporate guarantee in favour of KXPACH for a sum of not exceeding RM1 billion for the due performance and observance of ECK’s obligation under the project. The corporate guarantee is valid from today until July 31, 2022.
Ivory Properties said in consideration of the group carrying out its obligation, ECK will hold a stake in the SPV.
It added that ECK will also secure for Ivory Properties, the development rights to all residential components of the project as the main developer, while the profit derived from the development of the residential components will be shared between the two groups.
Ivory Properties’ share price closed up 0.5 sen or 3.23% at 16 sen today, for a market capitalisation of RM78 million.