This article first appeared in The Edge Financial Daily on June 5, 2018 - June 11, 2018

KUALA LUMPUR: After nearly a decade of delays in project execution, Berjaya Land Bhd (BLand) has decided to call it a day. The property group is divesting its investment in a Vietnamese financial centre project at a loss.

In a filing yesterday, BLand said it is selling off the entire 32.5% of total capital contribution in Berjaya Vietnam Financial Center Ltd (BVFC Ltd) to local firms Vinhomes Joint Stock Co and Can Gio Tourist City Corp for 884.93 billion Vietnamese dong (RM154.86 million) cash.

BLand said a capital transfer agreement was signed between its subsidiary Berjaya Leisure (Cayman) Ltd (BLeisure Cayman) and the purchasers.

BLand’s capital contribution in BVFC Ltd originally amounted to 967.31 billion Vietnamese dong. “The proposed disposal will result in an estimated loss of about RM25.1 million,” it said.

The multibillion-ringgit BVFC project was licensed in 2008, but faced multiple hiccups which hindered the project from being executed.

The development, said BLand, would have comprised an office building, five-star hotel, serviced residences and shopping mall on a 6.64ha land located in 3/2 Street, District 10, Ho Chi Minh City, Vietnam.

However, BLand clarified that BVFC Ltd has not commenced operations.

“The consideration for the proposed disposal was arrived at a willing buyer-willing seller basis, taking into consideration, among others, the business valuation, earnings potential and future prospects of BVFC,” it added.

The proposed disposal, said BLand, is subject to the approvals from the Department of Planning and Investment in Ho Chi Minh City and any other relevant authority.

BLand said the proceeds will be used by the group for working capital, adding that the proposal is expected to conclude during the second half of this year.

In relation to the disposal, Vinhomes will also potentially purchase Berjaya Vietnam International University Town One Member Ltd Liability Co (BVIUT) from BLeisure Cayman, having injected capital into the unit and effectively raising its stake in the firm to 99.2%.

BLeisure Cayman, which is left with a 0.8% stake in BVIUT, plans to dispose of the stake in the near future.

“Together with the proposed BVIUT disposal, the BLand group is also in negotiations on the potential sale of another of its Vietnamese subsidiaries,” said BLand, but did not elaborate on the details.

“Barring any unforeseen circumstances, the proposed disposals of all these three Vietnamese subsidiaries upon completion are expected to record a significant gain and improve the consolidated net assets of BLand,” it added.