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Award Of Contract To A Related Party

BackApr 22, 2013
Type Announcement
Subject OTHERS

1. Introduction

We wish to announce that AmTrustee Berhad, being trustee of CMMT (“Trustee”), on behalf of CMMT, has on 22 April 2013 entered into a Project Management Agreement (“PMA”) with CapitaLand Retail Malaysia Sdn. Bhd. (“CRMSB”), a related party of CapitaMalls Malaysia REIT Management Sdn. Bhd. (the "Manager"), for the appointment of CRMSB as project manager for the asset enhancement initiative (“AEI”) works to Gurney Plaza, Penang at a fee of 4.0% of the final contract sum for the AEI works (the “Appointment”). The estimated amount for the AEI works is RM7.0 million. CRMSB is a related party of the Manager by virtue of it being an indirect wholly-owned subsidiary of CapitaMalls Asia Limited (“CMA”), which is deemed a major unitholder of CMMT and a major shareholder of the Manager. 

The objective of the AEI works is to create additional retail space and enhance Gurney Plaza’s retail offering. The AEI works will include reconfiguration of space to improve the trade mix and sightlines. The AEI works will commence in mid-May 2013 and is expected to be completed by the first quarter of 2014.  

2. Financial Effect

The Appointment will not have any effect on the total units of CMMT and substantial unitholders’ unitholding of CMMT as it does not involve any allotment or issuance of new units of CMMT. The Appointment will also not have any material effect on the earnings, net asset value and gearing of CMMT. 

3. Approval Required

Pursuant to the Securities Commission’s Guidelines on Real Estate Investment Trusts, the Appointment is neither subject to the approvals of the Securities Commission nor the unitholders of CMMT.

4. Directors’ and Major Unitholders’ Interests

Mr Lim Beng Chee, Mr Ng Kok Siong and Mr Ho Chee Hwee Simon (Alternate Director to Mr Lim Beng Chee), who are Directors of the Manager, are also the Board representatives of CMA.  In addition, Ms Lim Hwee Li, the Chief Executive Officer of the Manager, and Mr Ho Chee Hwee Simon are also Directors of CRMSB.

Save as disclosed above and in section 1 of this announcement, none of the other directors of the Manager, major unitholders of CMMT, major shareholders of the Manager or persons connected with them has any interest, direct or indirect, in the Appointment.

5. Approval by the Independent Directors of the Manager

By the recommendation from the Audit Committee, the Independent Directors of the Manager have approved the Appointment on the basis that the Appointment is fair, reasonable, on normal commercial terms and is not detrimental to the interests of the non-interested unitholders of CMMT. The Appointment is therefore, in accordance with the Securities Commission’s Guidelines on Real Estate Investment Trusts. 

This announcement is dated 22 April 2013.



Announcement Info

Stock Name CMMT    
Date Announced 22 Apr 2013  
Category General Announcement
Reference No CG-130422-57518