KUALA LUMPUR (Jan 27): Sarawak Consolidated Industries Bhd (KL:SCIB) has denied allegations by Awana JV Suria Saga Sdn Bhd (Awana), the developer of the previously scrapped RM162 million Perak housing project, regarding outstanding debts and demanded the latter to settle the debt promptly.
The industrialised building systems (IBS) specialist said that Awana’s refusal to comply with repayment obligations constitutes a breach of their settlement agreement dated July 6, 2023 (SA 2023).
As a result, the company, through its wholly-owned subsidiary, SCIB Properties Sdn Bhd (SCIBP), is exercising its right to terminate the agreement due to this breach, according to the company filing on Monday.
"SCIBP has formally demanded for Awana to settle the total indebtedness of RM19.72 million together with any interest due within 14 days. Failure to settle within this timeframe will result in SCIBP taking necessary legal action to recover the total debt, with Awana being liable for all associated costs and expenses," SCIB said.
The total indebtedness, SCIBP said, includes RM18.64 million as per Schedule A of the SA 2023, RM492,432.72 in subsequent indebtedness as per Schedule A 2024 and an additional RM583,385.43.
The announcement came after Awana rejected the repayment terms and denied owing the stated amount.
The project in question, a civil servants housing contract known as “Program Perumahan Penjawat Awam” (PPAM Mualim), was included in the SA after both parties mutually agreed in July 2023 to terminate an earlier engineering, procurement, construction, and commissioning (EPCC) contract.
Under the agreement, SCIB acted as a corporate guarantor for loan facilities granted by MBSB Bank Bhd to Awana for project completion. In return, Awana was required to appoint SCIBP as the exclusive main contractor for the project.
However, on Jan 13, SCIB announced that the contract was scrapped after Awana failed to fulfil a key condition precedent under the SA, which required the appointment of an SCIB nominee to Awana’s board of directors within the agreed timeframe.
SCIB said Awana initially owed SCIBP RM18.72 million following the termination of the contract. A first payment of RM75,000 was made in August 2023.
On Jan 24, Awana argued that repayments should be based on project progress and revenue generated from property sales, contingent upon the profit and loss report for the project.
Shares of SCIB closed half a sen or 2.27% lower at 21.5 sen on Monday, valuing the company at RM141.84 million.