Berjaya Times Square settles claims

The Star 20/09/2003 By Jane Ritikos

BERJAYA Times Square will pay RM270mil in compensation to 400 purchasers of properties in the Times Square shopping, hotel and office complex in Kuala Lumpur for the four-year delay in completing the project.

Berjaya Times Square Sdn Bhd chairman Tan Sri Vincent Tan said the 100% full settlement of the claims would be made through the issue of shares in a company listed on the main board of the KLSE.

“We are working out a proposal to inject Berjaya Times Square into another listed company which will issue new shares to take over Berjaya Times Square, and at the same time issue shares to take care of our liabilities. One of our liabilities is the late delivery claims, which are substantial at RM270mil,” he said, adding that the amount was as agreed under the sale and purchase agreement signed with purchasers before 1999.

Construction of the country's biggest commercial complex after the Petronas Twin Towers began in 1995 and was to have been completed in 1999. However, completion was delayed until June this year due to the Asian financial crisis of the late 1990s.

Tan said that with the acquisition, Berjaya Times Square would become a wholly-owned subsidiary of the listed company. Details of the deal would be announced in two to three weeks.

“The buyers can sell the shares if they want cash. We think this is a win-win situation and the best proposal,” he told reporters after the opening of Times Square by Prime Minister Datuk Seri Dr Mahathir Mohamad yesterday.

Tan said he believed the purchasers would be happy to accept the deal and those the company met informally had generally responded well to the proposal.

“Their investments have appreciated, some as much as doubled, and on top of that they will get this compensation ... so they are happy. Only those who are unreasonable will not agree, but we have been reasonable,” he said when asked if the purchasers were agreeable to the deal.

Tan said the company had difficulties honouring the late delivery claim as it owed RM700mil to the banks for the project.

To pay off the debts, the company planned to issue ringgit bonds, this was expected to be completed by next year, he said.

Tan, who owns between 85% and 90% of Berjaya Times Square, said that with the acquisition, he hoped to own at least a 50% stake in the listed company.

“It is not like I will recoup, sell off and run away. I am still committed, I will continue to invest in the project and hope to be involved for a long, long time to see to its success,” he said.

Apart from the retail and office space and hotel, the complex features a 380,000 sq ft indoor theme park, believed to be the second largest in the world.

It will also house Malaysia's first IMAX 3D theatre.

Berjaya Times Square is keeping 60% of the space. Of the 40% balance, two-thirds have been sold, fetching RM900mil.

Tan expects to find buyers for the remaining space within six months.

He said the company expected to earn RM25mil in sales and rental income for the year ending April 2004.

Tan said it was a personal challenge and goal for him to complete Times Square, whose cost had risen from RM1.5bil to RM1.85bil due to the delay.

“If I was not able to organise this, the project would be an abandoned project, a big, ugly structure in Kuala Lumpur, and purchasers would have lost their money,” he said.

“The Prime Minister was encouraging and he said we must make sure the project was completed.”

About 150 retail shops are currently open at the complex, which was originally to open on Oct 15.