KUALA LUMPUR (Aug 15): S P Setia Bhd (KL:SPSETIA) has commenced arbitration proceedings against Putrajaya Holdings Sdn Bhd (PJH) for breach of contract with claims in damages of RM69.53 million.
The property developer’s 60% joint venture (JV) Setia Putrajaya Development Sdn Bhd filed the notice of arbitration against PJH on Thursday, according to its filing with Bursa Malaysia.
Setia Putrajaya had entered into a development agreement with PJH in December 2002 for development rights over certain lands in Putrajaya, of which the consideration had been paid.
“By reason of the breach of the development agreement by PJH, Setia Putrajaya has suffered damages and losses,” said S P Setia in the filing.
S P Setia said the arbitration is not expected to have any material effect on its earnings for the financial year ending Dec 31, 2024 (FY2024), or operational impact on the company.
The developer will make further announcements to the stock exchange if there are any material developments to the arbitration, it said.
S P Setia’s share price took a nosedive on Thursday, down 23 sen or 15.13% to RM1.29, despite its record high quarterly earnings for the three-month period ended June 30.
The heavy selling was triggered by unexpectedly higher losses of RM101 million, a large bulk of it being from the Battersea project, related to guaranteed rental agreements provided to buyers of an office tower.
The property developer was valued at RM6.27 billion, based on Thursday’s closing price of RM1.29.