1. INTRODUCTION

The Board of Directors of the Company wishes to announce that the Company has entered into a Joint Venture Agreement on 26 January 2022 with Menara Rezeki Sdn. Bhd. [Registration No. 200201029783 (597446-W)], a company duly incorporated in Malaysia and having its registered address at 277 C-2, Jalan Perkasa 1, Taman Maluri, 55100 Kuala Lumpur, Wilayah Persekutuan (“MRSB”) and Menara Rezeki Properties Sdn. Bhd. [Registration No.: 201101023480 (951616-V)], a company duly incorporated in Malaysia and having its registered address at No. 21M, Jalan Pandan Indah 4/2, Pandan Indah, 55100 Kuala Lumpur, Wilayah Persekutuan (“MRPSB”) to develop the mixed residential and retail development in 3 phases at Jalan Tun Razak, Kampung Baru, Wilayah Persekutuan on a leasehold land measuring approximately 3.69 acres in area (“the land”) (“the proposed development”).

2. INFORMATION ON MENARA REZEKI SDN. BHD. AND MENARA REZEKI PROPERTIES SDN. BHD.

2.1 MRSB was incorporated in Malaysia under the Companies Act, 1965 on 29th January 2002 and registered under the Companies Act, 2016. The principal activity of MRSB is involving in construction activities. The issued share capital of MRSB is RM7,000,000.00 comprising of 7,000,000 ordinary shares.

The Directors of MRSB are Dato’ Saiful Nizam bin Mohd Yusoff and Muhammad Akmal Bin Saiful Nizam, while the shareholders of MRSB are as below:

2.2  MRPSB was incorporated in Malaysia under the Companies Act, 1965 on 2nd January 2011 and registered under the Companies Act, 2016. The principal activity of MRSB is involving in construction activities. The issued share capital of MRSB is RM1,000,000.00 comprising of 1,000,000 ordinary shares.

The Directors of MRPSB are Dato’ Saiful Nizam bin Mohd Yusoff and Muhammad Akmal Bin Saiful Nizam, while the shareholders of MRPSB are as below:

3. INFORMATION ON THE LAND

The Project comprises the following leasehold lands:

a) the seven (7) plots of leasehold lands held under Master Title(s):-

1. Pajakan Negeri 47467, Lot 3351 Seksyen 41;
2. Pajakan Negeri 47468, Lot 3352 Seksyen 41;
3. Pajakan Negeri 47469, Lot 3353 Seksyen 41,
4. Pajakan Negeri 47470, Lot 3354 Seksyen 41;
5. Pajakan Negeri 47471, Lot 3355 Seksyen 41;
6. Pajakan Negeri 47473, Lot 3356 Seksyen 41; and
7. Pajakan Negeri 47474, Lot 3357 Seksyen 41,

all in Bandar Kuala Lumpur, District of Kuala Lumpur, State of Wilayah Persekutuan Kuala Lumpur comprising of Two Hundred and Fifty Two (252) stratified units of flat owned by Two Hundred and Fifty Two (252) separate individual/entity registered/beneficial owners (collectively, “Owners’ Land”) with the category of land use stated as “Bangunan” and the express condition of title stated as “Pangsapuri”;

b. the three (3) plots of lands described as Lot 3358, Lot 3360 and Lot 3361 which are reserved for a public purpose all in Bandar Kuala Lumpur, District of Kuala Lumpur, State of Wilayah Persekutuan Kuala Lumpur collectively owned by Dewan Bandaraya Kuala Lumpur as registered owner (collectively, “DBKL Land”); and

c. the one (1) plot of land described as Lot 3359 in Bandar Kuala Lumpur, District of Kuala Lumpur, State of Wilayah Persekutuan Kuala Lumpur collectively owned by Majlis Agama Islam Wilayah Persekutuan (“MAIWP Land”).

(collectively, hereinafter referred to as the “Said Land”)

4. PROPOSED DEVELOPMENT ON THE LAND

The Company via MRPSB is desirous to jointly develop, construct and complete a low-entry affordable commercial development project on the Land which shall consist of predominantly 2,960 units of small size service apartment at average built up size of 400 sq. ft. to 600 sq. ft. save and except for 252 units of the apartment to be built thereon and handover to the Existing Owners as part of the Existing Owner’s Entitlements, which are more particularly described in the Shareholder Agreement ("SA") and upon the terms and conditions set out therein ("Project").

5. SALIENT TERMS

The salient terms of the Agreement are as follow: -

The Existing Owner’s Entitlements

• Initial payment RM1,460,000.00 to be paid to the Existing Owners as moving out cost.
• Payment of RM16,051,200.00 to be paid over a period of 4 year to subsidize the rental of the Existing Owners after move out.
• Moving in cost of RM1,260,000.00 to be paid upon vacant possession of the new apartment units to the Existing Owners.
• To provide partly furnished cost (kitchen cabinet, hob and hood, water heater and air conditioning to bedroom) of RM3,825,000.00 to Existing Owners.
• The estimated construction cost of the Owner’s Tower at RM112,396,396.00.

MRSB’s Entitlements

MRSB shall be entitled to enter into a share sale agreement to acquire 70% equity in MRPSB for RM700,000.00.

MRPSB’s Entitlements

MRPSB shall be entitled to an advance of RM2,000,000.00 to be utilised for initial expenses such as stamp duty, loan documentation, professional fees, consultant fees and etc. Upon execution of this JVA and an additional advance of RM13,000,000.00 for compensation to the Existing Owners. All the advances will be refundable if the agreement is terminated.

6. SOURCE OF FUNDING

The Company intends to fund the Proposed Development through a combination of internally generated funds, equity fund raising, sales of development and bank borrowings.

The exact combination of internally generated funds, equity fund raising, sales of development and bank borrowings will be determined by the Management at a later stage, after taking into consideration the Group’s gearing level, interest costs and internal cash requirements for its business operation.

7.  RATIONALE OF THE PROPOSED DEVELOPMENT

The Proposed Development will provide to the Group an opportunity to sustain its development business within the Klang Valley in line with the Group’s core strategy. The Management is of the view that the Proposed Development represents a strategic investment opportunity, after taking into consideration of the location of the Land, which is situated at the heart of Kuala Lumpur city center. 

8. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSON CONNECTED TO THEM

Save as disclosed below, none of the Directors, major shareholders and/or persons connected to them has any interest, direct and/or indirect, in the Proposed Development. The Proposed Development is deemed a related party transaction (“RPT”) under the Main Market Listing Requirements of Bursa Securities (“Listing Requirements”) due to the interests of one of the Director of JIANKUN.

Dato' Saiful Nizam is the Major Shareholder and Managing Director of MRSB and MRPSB. He is also an Independent Non-Executive Director of JIANKUN. As such, Dato' Saiful Nizam is deemed interested in the Proposed JV.

9. FINANCIAL EFFECT ON THE PROJECT

Share capital and substantial shareholders' shareholding

The JV will not have any effect on the issued and paid-up share capital as well as substantial shareholders' shareholding of the Company.

Net Assets (“NA”)

The JV will not have material effect on the NA of the Company for the current financial year end.

Earnings

This JV will not have material impact on the earnings of the Company for the current financial year. The Directors of JIANKUN expect the JV to contribute positively to the future earnings of the Group. 

10. APPROVAL IS REQUIRED

The Proposed Development is conditional upon approvals being obtained from the following:-

(a)          shareholders of the Company at an EGM to be convened for the Proposed Development and SA (if required); and

(b)          any other authorities/parties.

11. DOCUMENTS AVAILABLE FOR INSPECTION

The JV Agreement (with English translation) is available for inspection at the Registered Office of the Company following the submission of this announcement from Mondays to Fridays (except public holidays) during business hours.

This announcement is dated 26 January 2022.