HCK Capital Group Bhd (HCK) is to step in to revive the ailing Remix 1 project in USJ1 after original developer – True Renaissance Sdn Bhd (a unit of Mammoth Empire Holding Sdn Bd) ran into financial difficulties. This move was overwhelmingly endorsed at a creditor’s meeting on 29 Sep 2022 where buyers holding over 90% of the debt voted in favour of the court-sanctioned Corporate Voluntary Arrangement (CVA) to allow Subang Sentral Sdn Bhd (a subsidiary of HCK) to come in as a White Knight.
This is the second time that HCK has had to step in after the adjoining Remix 2 project also ran into trouble. Due to delays in the project, the landowner – Dergahayu Sdn Bhd – got into a legal tussle with True Renaissance and took over the Remix 1 project in 2019 while HCK was tasked to revive Remix 2. The latter undertaking has been a success as the newly named Edumetro project is on track to have three of its four towers to be completed by the first quarter of 2023. The Edumetro project has been repositioned as an ‘education city’ with a GDV of RM850 milllion. Its profile was also significantly boosted with news that SEGi will open a campus to anchor the edumetro site.
Meanwhile, the rescue plan by the other ‘White Knight’ for Remix 1 failed to materialise, paving the way for HCK to enter the frame once more as the rescuer. The move will involve HCK pumping in an estimated RM900 million to revive Remix 1, which has only seen a 30% completion rate under the original developer. Bridging financing, internal funds and sales proceeds will be used to finance this abandoned and HCK will be entitled to complete the unsold towers and keep the proceeds in return for rescuing the developer.
Under this rescue package, purchasers agreed to waive their rights to Liquidated Ascertained Damages (LAD) as well as to developer interest bearing scheme (DIBS). Purchasers, however, will not have to incur any additional payments to the original purchase price despite the increase in construction costs. They had purchased their units between RM450 and RM550 per sq ft while current market valuation places it between RM850 and RM950 per sq ft.
The Remix 1 project has already been delayed for five years and HCK estimates the completion of the development to take up to seven years, while the units bought earlier from True Renaissance will first be completed within three to five years. The entire development will comprise of residential, commercial and retail components.
