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Award Of Contract To A Related Party

BackJun 01, 2017
Type Announcement
Subject OTHERS


1. Introduction

We wish to announce that MTrustee Berhad (formerly known as AmTrustee Berhad), being trustee of CMMT (“Trustee”), on behalf of CMMT, has on 1 June 2017 entered into a Project Management Agreement (“PMA”) with CapitaLand Retail Malaysia Sdn. Bhd. (“CRMSB”), a related party of CapitaLand Malaysia Mall REIT Management Sdn. Bhd. (the "Manager"), for the appointment of CRMSB as project manager in respect of the following asset enhancement initiative (“AEI”) works: -

(a)    AEI works for the anchor tenant space at Levels 1 and 2 of East Coast Mall (“ECM AEI”); and

(b)    A feasibility study of the retail space from Concourse to Level 3 of Sungei Wang Plaza (“SWP FS”) provided always that the SWP FS is up until the stage of the obtaining approved building plans (“SWP AEI”),

        [ECM AEI and SWP AEI are collectively referred to “AEI Works”]

at a fee exclusive of Goods and Services Tax amounting to 2.85% of the final contract sum for the AEI Works (the “Appointment”). The AEI Works are subject to authority approval and are estimated to cost RM67,500,000.

CRMSB is a related party of the Manager by virtue of it being an indirect wholly-owned subsidiary of CapitaLand Mall Asia Limited (“CMA”), which is deemed a major unitholder of CMMT and a major shareholder of the Manager. The AEI Works are expected to be completed by fourth quarter of 2017.

2. Financial Effect

The Appointment will not have any effect on the total units of CMMT nor on the 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 Jason Leow Juan Thong and Mr Ng Kok Siong, who are Directors of the Manager, and Mr Lee Hui Yeow who is Alternate Director of Mr Ng Kok Siong, are also the Board representatives of CMA and CapitaLand Limited. In addition, Ms Low Peck Chen, the Chief Executive Officer of the Manager, and Mr Lee Hui Yeow 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

Upon 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 1 June 2017.

Announcement Info

Stock Name CMMT
Date Announced 01 Jun 2017
Category General Announcement for PLC
Reference Number GA1-01062017-00050