*Note: Country Heights has clarified that the defaulted sum is only RM89.67 million. 

KUALA LUMPUR (Aug 14): Country Heights Holdings Bhd, the property developer founded by tycoon Tan Sri Lee Kim Yew, has defaulted on the payment of Islamic term financing facilities totalling RM89.67 million provided by MBSB Bank Bhd.

The default by the group's indirect wholly-owned units, Mines Waterfront Business Park Sdn Bhd (MWBP) and Mines International Exhibition Centre Sdn Bhd (MIEC), were in respect of a charge created as security for the financing facilities.

In a bourse filing on Monday (Aug 14), Country Heights attributed the default to differences in cash flow timing due to delays in client payments, resulting in a temporary cash flow constraint.

MWBP, it said, received a notice of default for its IslamicTerm Financing Facility amounting to RM91.44 million as at May 9. The company has been served with a winding-up petition in relation to the termination of a sale and purchase agreement dated Dec 31, 2014.

MIEC, meanwhile, received a notice of default for an Islamic Term Financing Facility amounting to RM89.67 million as at Aug 1.

“MBSB Bank recalled the facilities granted to MWBP as a result of the winding-up petition announced to Bursa Securities on Aug 1. Following that, MBSB Bank will have the right to file legal action against MWBP and MIEC in order to enforce their respective security interests in the facilities,” said Country Heights.

The group said it is in talks with the liquidator and MBSB Bank to resolve the default amicably, adding that it is working towards the settlement of the liquidation.

Last month, the group proposed a private placement to raise RM11.25 million, mainly for the refurbishment of  the Palace of the Golden Horses, a luxury hotel at the Mines Wellness City, an integrated health and wellness resort township located in Mines Resort City.

Lee was the subject of a bankruptcy order issued earlier this year, before he stepped down as the chairman of Country Heights. The tycoon insisted at that time that he was still “solidly solvent”. Country Heights, meanwhile, had said that the matter was a private dispute involving a shareholder, and had no bearing on the group’s finances.

Country Heights shares closed up one sen or 2.7% at 38 sen on Monday, giving the group a market capitalisation of RM113.24 million.