Gadang calls off Kwasa Damansara land buy after failing to get EPU waiver for Bumi equity requirement

KUALA LUMPUR (April 29): Gadang Holdings Bhd has called off its planned acquisition of a 21.08-acre land in Kwasa Damansara — known as R3-1 — for RM114.78 million from Kwasa Development (3) Sdn Bhd (KD3), to be developed into a residential project.

The termination came after the builder-cum-property developer failed in its appeal to the Economic Planning Unit (EPU) — a unit within the Prime Minister's Department — for a waiver of the Bumiputera equity requirement to facilitate its acquisition of the Kwasa Damansara land, its bourse filing on Monday showed.

Its board of directors had written to KD3 on Monday to inform them that the appeal to EPU was not successful, and gave notice to terminate the sales and purchase agreement (SPA), Gadang said.

“With this termination, the SPA is rendered null and void, and neither party has any further rights nor claims against the other party in respect of the SPA,” it said.

Kwasa Land Sdn Bhd, the master developer of the Kwasa Damansara township and parent of KD3, had previously awarded the development rights of the plot, known as R3-1, to Gadang in 2017 via a development rights agreement (DRA) inked between them.

In return for the rights to develop the land, Kwasa Land was to get RM126.72 million from Gadang, and 5.5% of the revenue from a proposed RM700 million residential project on the plot that was planned to be completed in six years. Of the RM126.72 million, Gadang had paid RM76.4 million so far.

Then in November 2023, the parties agreed for Gadang to buy the land outright instead for RM114.78 million, and inked the SPA to replace the DRA. So, it was to top up RM38.38 million to pay for the acquisition, pending the EPU's approval, according to Gadang's earlier filings.

Last week, Gadang said the EPU had rejected its proposed acquisition as it did not meet the 30% Bumiputera equity ownership requirement. At the time, it said it would appeal to the EPU for a waiver of the requirement.

With the SPA terminated, the parties will now revert to the development rights agreement inked, it said.

Shares in Gadang finished two sen or 5.19% higher at 40.5 sen, giving the group a market capitalisation of RM291.08 million. The counter has risen 19.12% so far this year and 35% over the last year.