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Chen-led consortium to invest RM9.6b in Karambunai resort

     

Written by Chua Sue-Ann   

Wednesday, 20 April 2011 11:23

 

 

KUALA LUMPUR: A consortium comprising gaming tycoon Tan Sri Chen Lip Keong’s group of companies and Prism Crystal Enterprises Ltd are set to invest RM9.6 billion to develop the Karambunai Integrated Resort City in Sabah with the project’s landowners.The resort is situated on a 1,100ha piece of land, owned by Karambunai Corp Bhd and Petaling Tin Bhd, on the Karambunai peninsula.

Chen has substantial interest in both companies and is the president of both.

The low-profile businessman is the single-largest shareholder of Karambunai Corp, holding a 43.9% stake. Petaling Tin has a 34.08% block.

In a filing with Bursa Malaysia yesterday, Petaling Tin said it has not signed any agreement with any parties pertaining to the resort project and there are no corporate developments that warrant future disclosures to the stock exchange at this juncture.

Little is known about Prism Crystal Enterprises, which is said to be a special purpose vehicle formed to participate in the Karambunai Integrated Resort City project.

At present, details are scarce on the RM9.6 billion investment in the resort but it is learnt that Chen’s two other listed companies — steelmaker FACB Industries Inc Bhd and Hong Kong-listed gaming and leisure company NagaCorp Ltd — are not part of the plans.

Chen, who founded NagaCorp, is currently the group’s CEO and executive director and he holds a controlling 63.07% stake in the group.

NagaCorp owns and operates NagaWorld, the only licensed casino in Cambodia’s capital city, Phnom Penh.

Chen also appears to have considerable clout with the Cambodian government, having been appointed as economic adviser to Cambodia’s prime minister and an adviser with ministerial status to the Cambodian government.

Last month, Karambunai Corp announced that it had entered into a joint venture with Cambodia-based China Central Asia Group Co Ltd (CCAG) to develop the Karambunai resort’s first phase, the Karambunai Beachfront mixed development project.

CCAG, a shareholder of Prism Crystal Enterprises, will invest a seed capital of US$100 million (RM306 million) as a revolving fund for the joint venture.

Karambunai Corp’s subsidiary, Karambunai Resorts Sdn Bhd, will contribute 75 acres of land valued at RM270 million to the joint venture.

Announcing the consortium’s entry yesterday, Prime Minister Datuk Seri Najib Razak said the Karambunai Integrated Resort City is expected to contribute a gross national income of RM9.3 billion and create about 11,002 jobs by 2020.

Plans for the Karambunai resort include attractions like a water theme park, mangrove research centre and spa village.

The project will also house luxury residences, hotel accommodation, retail space and eco-nature facilities.

However, questions still linger as to whether the resort will eventually feature a casino despite the company denying reports on the plans.

Karambunai Corp already has hospitality operations in Sabah with its five-star Nexus Resort Karambunai and Nexus Golf Resort
The Karambunai Integrated Resort City will be eveloped over eight years from 2012 to 2019.

Following Najib’s announcement yesterday, shares of both Karambunai and Petaling Tin rose to their highest in almost two months.

Petaling Tin shares surged 35% to 48.5 sen from 36 sen a day earlier with 8.59 million shares done.

Karambunai Corp’s shares climbed 4.5 sen to close at 25.5 sen with 160 million shares traded.

 


This article appeared in The Edge Financial Daily, April 20, 2011.

 

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