Talam close to reaching deal with house owners

Talam close to reaching deal with house owners

By FRANCIS FERNANDEZ

TALAM Corp Bhd, once the country's biggest builder of low-cost homes, is close to reaching an agreement with property owners of its RM2.2 billion Puncak Jalil township to waive late ascertained damages (LAD), people directly involved in the matter said yesterday.


Launched in 2001, the Puncak Jalil township is being built on 324.3 hectares of land in Bukit Jalil, and is Talam's single biggest project so far.


As at last year, sales from Puncak Jalil stood at RM1.64 billion with some 9,309 properties sold.


However, more than 6,000 units, comprising residential and commercial houses, remain undelivered.


Property owners who spoke on condition of anonymity told Business Times they received notification from Talam's unit Maxisegar Sdn Bhd for a waiver of which some of it are for three-year-old LADs.


As part of the deal, IJM Corp Bhd, the country's third largest builder by revenue, will undertake to complete the remaining portion of the project.


The LAD is a major challenge for Talam, as out of the group's RM896.3 million outstanding debt, about RM500 million is backed by receivables on the sale of houses in Puncak Jalil.


Repayment on the asset-backed securitisation is due February next year.


In 2004, Maxisegar opted for a three- to four-year tenure of RM250 million Islamic debt to finance the project, but due to a series of labour shortages and material price increases, the project came to halt in late 2005.


Subsequently, Malaysian Rating Corp Bhd in January 2006 cut the rating of Maxisegar by six levels to BB from A, which defaulted two months later, but by June in the same year the default was withdrawn.


A month before the default withdrawal, the major stakeholders in Talam's parent Kumpulan Europlus Bhd (K Euro) signed an agreement with IJM Corp, to sell up to 30 per cent of K Euro for 28 sen a share.


The share sale deal between IJM and K Euro was agreed upon, when the Talam parent was still in the midst of finalising the West Coast highway project linking Banting to Taiping.


Formalisation of the agreement had been delayed seven times, pending the finalisation of the highway project award.


But with the Government giving the go-ahead last week, it should pave the way for IJM to gain control of K Euro.


IJM has stated before that among the main priorities upon gaining control of K Euro is to address the financial problems of Talam.


For its nine-month to August 2006, Talam's net loss narrowed to RM14.57 million from RM267.49 million a year earlier, while revenue fell 23.25 per cent to RM228.24 million from RM297.4 million.