KUALA LUMPUR (Aug 13): George Kent (M) Bhd has served a notice of arbitration on Malaysian Resources Corp Bhd (MRCB) today, over a dispute on financing requirements for their joint venture (JV) company MRCB George Kent Sdn Bhd, that is undertaking the construction of the Light Rail Transit Line 3 (LRT3).
“George Kent and MRCB have a difference of opinion in the interpretation of certain provisions of the shareholders agreement [SHA] with regards to the options for securing of the financing requirements for the JV company,” George Kent said in a filing with Bursa Malaysia today.
“George Kent has in exercising its rights under the SHA, referred the matter to arbitration to seek certain declarations as to the interpretation of those provisions,” the group said.
The two groups had signed the SHA on June 8, 2015, setting up their joint venture on a 50:50 basis to tender for the LRT3 from Bandar Utama, Petaling Jaya to Johan Setia, Klang.
To date, the issued and paid-up share capital of the JV company amounts to RM10 million, with George Kent’s wholly-owned subsidiary George Kent Rail Sdn Bhd and MRCB’s wholly-owned subsidiary MRCB Builders Sdn Bhd, each holding a 50% equity interest.
On Sept 4, 2015, Prasarana Malaysia Bhd had appointed the JV company as project delivery partner for the LRT3 project.
On Jan 25, 2019, the JV company signed a revised fixed price contract worth RM11.4 billion, following the government’s decision to change the structure of the LRT3 project.
In a separate filing today, MRCB confirmed it had received the notice of arbitration from George Kent.
Shares of George Kent closed four sen or 3.60% lower at RM1.07 today, valuing the company at RM602.70 million.
Meanwhile, shares of MRCB closed three sen or 3.35% lower at 86.5 sen, giving it a market capitalisation of RM3.82 billion.