Ho Hup Halts Bukit Jalil Flex Project, Sells Land to Exsim for RM110 Million

KUALA LUMPUR (May 6): Ho Hup Construction Co Bhd’s RM1 billion integrated development in Bukit Jalil will be put on hold, as the company moves ahead with a plan to dispose of a 3.09-acre parcel of land for RM110 million in cash.

The transaction, signed between Bukit Jalil Development Sdn Bhd (BJD) — a wholly-owned subsidiary of Ho Hup— and Exsim Persiaran Jalil Sdn Bhd, a unit under Exsim Development Sdn Bhd, is intended to strengthen the group’s balance sheet, according to its stock exchange filing on Monday.

The Bukit Jalil tract had previously been approved for the Flex project, envisioned as two high-rise towers consisting of small office flexible office (SOFO) units, a hotel, and serviced residences, rising above an eight-storey podiumwith three anchor retail outlets and 20 shoplots.

n connection with the divestment, Exsim Persiaran Jalil plans to halt the ongoing Flex project and terminate all agreements with the appointed consultants, contractors, and existing buyers, Ho Hup announced.

Apart from the RM110 million cash consideration, Exsim Persiaran Jalil will also take on RM10.6 million in outstanding development charges owed by BJD.

From the gross proceeds, Ho Hup has allocated RM80 million for bank loan repayments, RM21 million for reimbursing current purchasers of Sovo units, and RM8.5 million to settle dues with consultants and contractors.

The land price was finalised based on its indicative market value, factoring in the development order and vacant possession, amounting to RM108 million as assessed by an independent valuer.

According to the group’s audited financial statements as of December 2023, the parcel carried a net book value of RM119.42 million. Consequently, Ho Hup is expected to record a one-off disposal loss of RM9.92 million.

Ho Hup explained that given the Flex project’s recent launch stage and its significant capital demands, the disposal provides an opportunity to enhance liquidity and strengthen the group’s financial standing.

The company further noted that the transaction will lower its gearing ratio to 1.31 times (total borrowings of RM429.14 million against net assets of RM328.58 million), compared to 1.49 times (borrowings of RM509.14 million against net assets of RM338.48 million).

The land divestment, which remains subject to necessary approvals — including shareholder consent at an extraordinary general meeting (EGM) — is anticipated to be finalised in the third quarter of 2024.