KUALA LUMPUR (Sept 1): Bintai Kinden Corp Bhd (KL:BINTAI) will receive RM24.7 million under a proposed settlement with Universiti Islam Melaka Bhd (UIMB) over its long-standing concession to provide student accommodation at Universiti Islam Melaka (UNIMEL).
Bintai Kinden said in a bourse filing on Tuesday that the proposed arrangement would see UIMB pay the RM24.7 million to Bintai Kinden’s wholly owned subsidiary, Optimal Property Management Sdn Bhd (OPM), comprising monthly concession payments amounting to RM14.7 million and RM10 million to recover outstanding concession arrears.
UIMB is targeting a full and final settlement by September 2027, with an option to extend to December 2027.
The settlement will involve either UIMB settling the amount owed to OPM as well as OPM’s underlying financing facility with MBSB Bank Bhd, followed by the termination of the concession agreement, or, subject to UNIMEL board approval, taking over OPM from Bintai Kinden.
In a statement, Bintai Kinden managing director cum chief executive officer Datuk Tay Chor Han said the proposed arrangement would provide the group with more predictable cash flow while speeding up the recovery of outstanding receivables.
“More importantly, establishing a clear timetable to fully settle the MBSB financing or facilitate a takeover of OPM by late 2027 permanently resolves our legacy concession exposure,” he said.
Tay said the group could now focus on growing its core mechanical and electrical (M&E) engineering order book and pursuing high-value developments, including its recently secured RM296.5 million project in Ayer Keroh.
The proposed settlement marks a step towards resolving Bintai Kinden’s long-running financial issues linked to the UNIMEL project, which contributed to the group’s entry into Practice Note 17 (PN17) status in March 2023.
Bintai Kinden had previously defaulted on RM109 million in financing facilities. The group attributed its financial difficulties partly to the Melaka government’s failure to address payments owed in the UNIMEL project.
The student accommodation project was awarded to OPM in early 2016 under a RM121 million concession agreement. MBSB Bank later terminated Bintai Kinden’s role as corporate guarantor for RM109 million in Islamic financing facilities granted to OPM.
In February this year, Bintai Kinden exited the PN17 after completing its regularisation plan.