PETALING JAYA: Only World Group Holdings Bhd’s (OWG) 70%-owned subsidiary Kota Tinggi Resorts Sdn Bhd (KTR) has agreed to surrender the vacant possession of a waterfall project in Johor “at the request of the state government”, which could result in a write off of RM1.4 million.
The privatisation agreement between KTR and the state government will also be terminated, according to OWG’s filing with Bursa Malaysia.
“As at the date of this announcement, the handover of the project had been completed on March 3,“ the group said.
The privatisation agreement, dated March 30, 1992, entailed that the state government of Johor would lease the area known as Air Terjun Kota Tinggi, Kota Tinggi, Johor (waterfall) for a period of 30 years to KTR and KTR would develop the waterfall into a tourist resort complex and facilities.
KTR had proceeded to develop and completed the project by building a hotel/chalet, restaurant, water pool and slides, upgrading the safety measures and improving other amenities (F&A).
OWG expects the mutual termination to have a financial impact on the group as the project contributed 1.2% and 2.5% to its total revenue and profit before taxation for the financial year ended June 30, 2018.
“Further, there may be a write-off of equipment and inventories estimated at RM1.4 million resulting from the handover of the project,“ OWG said.
KTR is principally engaged in the operation of a resort and a food service outlet at the project. Its shareholders are OWG (with 70% equity interest) and Datuk Paduka Tengku Putra Bin Tengku Azman Shah (with 30% equity interest). Its directors are Tan Sri Koh Cheng Keong and Puan Sri Chew Lean Hong.
Following the termination of the agreement, both KTR and the Johor government will have no claims whatsoever against each other in respect of all matters arising from the privatisation agreement.
Source: The Sun Daily