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Saturday, September 4, 2010

Naza aborts pact to build Matrade Centre

The Naza group, one of the country's biggest privately-held conglomerates, has terminated an agreement with Kumpulan Jetson Bhd to help build the new Matrade Centre for RM628 million.

Jetson received a notice from TTDI KL Metropolis Sdn Bhd yesterday to terminate the shareholders agreement sealed by the two companies earlier.

It would be seeking legal advice, Jetson said in a statement to Bursa Malaysia yesterday.

Jetson and TKLM, owned by the Naza group, sealed a pact last year to carry out the planning, design and construction of the new Matrade Centre at Jalan Duta in Kuala Lumpur.

Early last month, Business Times had reported that the Naza brothers may exit Jetson, barely 12 months after they took control of the company.

By late August, however, Jetson told the stock exchange that it was not aware of any plan by key shareholders to sell their stakes in the company.

Nevertheless, the uncertainties have taken a toll on the stock, which fell by some 24 per cent over the past 30 trading days to close at RM1.19 yesterday.

On the surface, the termination of the agreement with Jetson lends more credence that the Naza brothers are moving towards an exit strategy.

SM Nasarudin SM Nasimuddin said he will reserve his comments at this point of time.

The Naza brothers, SM Nasarudin and younger sibling SM Faliq, bought 33.15 per cent of Jetson for RM12.3 million.

The brothers, heirs to the Naza empire, had since then twice sought to buy out the other Jetson shareholders, while maintaining its listing status.

Datuk Teh Kian An and his family members were the major sellers of the initial block of shares that allowed the Naza brothers passage into Jetson, their maiden foray in a public-listed company.

Teh was the former controlling stakeholder of Jetson and is the current group managing director.

Terminating Jetson from the Matrade project should not come as a big shock to the market as the writing was on the wall as early as last month. This was when Jetson ended an agreement with China State Construction Engineering (Hong Kong) Ltd to develop a 38-storey building in Kuala Lumpur for Naza TTDI Sdn Bhd.

Business Times understands that in recent weeks both parties had moved closer towards bridging their differences.

"A gentleman's agreement will be reached sooner rather than later," a source familiar with the matter said.

By Business Times

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