KUALA LUMPUR (Sept 7): Gabungan AQRS Bhd's wholly-owned property development unit, AQRS The Building Co Sdn Bhd (AQRS-TBC), has been served with a letter of demand for the full outstanding payment of RM50.46 million to Lien Hoe Corp Bhd, after the company allegedly defaulted on its payment schedule.

Lien Hoe, in a filing to Bursa Malaysia, said the letter of demand, served by its wholly-owned unit Pro-Meridian Sdn Bhd, requires AQRS-TBC to pay RM50 million and accrued interest of RM456,954.

"AQRS-TBC is required to pay the sum within 14 days from the date of the letter, failing which legal proceedings will be commenced for the recovery of the entire sum together with interest and cost," said Lien Hoe.

According to the group, AQRS-TBC has defaulted on the agreed schedule of payment pursuant to the Further Supplemental Agreement dated July 22, 2016 and other agreements.

Additionally, Lien Hoe said it has yet to count in any impairment loss on other receivables in respect of the late payment, as the board opined it is "premature" to do so.

On Sept 30, 2011, Pro-Meridian and AQRS-TBC proposed to jointly undertake the development of two 38-storey blocks of serviced apartments in Johor Bahru, which had a gross sale value of RM450 million.

Under the agreement, AQRS-TBC is slated to pay Pro-Meridian a guaranteed share of revenue from the development amounting to RM117 million cash.

The development was scheduled to be completed by the first half of 2015. On July 22, 2016, the two companies inked a further supplemental agreement to extend the completion date of the apartments.

The agreement was to reschedule the balance payable by AQRS-TBC to Pro-Meridian — amounting to RM61.75 million — in 28 tranches between July 31, 2016 and Aug 28, 2019.

Gabungan AQRS's share price closed 4 sen or 2.35% higher at RM1.74, giving it a market capitalisation of RM742.9 million.

Shares of Lien Hoe closed 1 sen or 2.74% lower at 35.5 sen, for a market capitalisation of RM121.75 million.