Diversified Malaysian conglomerate MMC Corp Bhd is claiming more than $53.3m in compensation from Saudi’s government over the termination of its $30bn contract to develop Jazan Economic City.
MMC has stated that it had carried out initial works to enhance the value of the property at Jazan, and the claimed sum reflects this and the additional value generated. The coporataion has called upon the Malaysian ambassador to Saudi Arabia to preside over the matter on its behalf.
MMC group MD Datuk Hasni Harun told reporters after an AGM yesterday that the termination was due to the inability of the company and its partner, the Saudi Binladin Group, to fund the mammoth project. The termination came last month, with Aramco appointed to take over.
Meanwhile, Hasni said MMC is looking to “unlock the value of some of its assets” in a move to reduce its debts, which currently stand at $1bn and $7bn at the company and group level, respectively. Market confidence remains strong, however, and MMC shares are trading at a 52-week high.
Going forward, the company plans to list its power generation company Malakoff by the first-half of 2014 and there is a possibility of it listing its two ports in Johor. “We can address the issue of high gearing, especially at Malakoff Corp Bhd,” said Hasni.