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Tuesday, April 7, 2009

The hammer fails to fall again?

The auction of Putra Place, which houses The Mall, The Legend Hotel and an office tower, is likely be put off for the third time

A group of banks may have to wait a tad longer to recover their money as the auction of a prominent commercial property in Kuala Lumpur would likely be put off for the third time.

Putra Place, which houses The Mall, The Legend Hotel and an office tower, was meant to go under the hammer on April 16.

But this was disrupted after property owner Metroplex Holdings Sdn Bhd got a restraining order against any action by its creditors, which in effect put a stop to the auction. The restraining order, obtained without the knowledge of the lenders, was set aside last Friday.

"They filed for and obtained the restraining order without serving our clients first. Based on these grounds, the judge has set aside the order," said Alan Gomez, counsel for Commerce International Merchant Bankers Bhd (CIMB).

CIMB and RHB Investment Bank Bhd are agents to the group of banks that gave a loan to Metroplex.

Putra Place is located opposite the Putra World Trade Centre in downtown Kuala Lumpur.

The Mall is a shopping complex with eight floors, the office tower covers the 10th floor to the 33rd floor, while the 25-storey Legend Hotel includes serviced apartments and penthouses.

The freehold property was first put up for auction in April 2008. The reserve price then was RM705 million. Since no bids were received, the price was cut by a tenth to RM634.5 million.

Its second date with the hammer was on January 20 2009, but this was postponed to capture a wider net of bidders.

Due to the size of the sale, the judge decided in January that one advertisement was not enough and more notices were needed locally and abroad. This covered Canada, Los Angeles (the US), Indonesia, Hong Kong, Taiwan, Japan and Singapore.

But Metroplex on January 22 2009 got the restraining order, and the notices, which were supposed to be put up twice before April 16, did not appear.

"Because of the order, we were unable to advertise. We will be meeting our clients to seek their instructions towards the sale and a new auction date is likely to be fixed," Gomez said.

By Business Times (by Vasantha Ganesan)

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