by Khalil Adis
IOI Corporation Berhad´s has aborted its proposed RM586.7 million acquisition of Menara Citibank, causing it to forfeit an earlier payment of RM73.4 million, the company has revealed in a statement.
The company cited the worsening global financial crisis as the reason why it has decided to call off the acquisition.
“Due to the recent sudden adverse developments in the global economic environment which have spread to this region and impacted negatively on business sentiments, the company has, after due and careful deliberations, decided that it would be in the overall best interests of the company and its shareholders not to proceed with the proposed acquisition,” IOI Corporation said in a statement.
IOI Corporation made agreements with the various vendors last August comprising Citigroup unit, Menara Citi Holding Company Sdn Bhd (50 percent), CapitaLand (30 percent) and Amsteel Sdn Bhd (20 percent).
It became unconditional on 31 October and the due date for payment of the balance of the purchase price was 11 November.
IOI Corporation then received a letter from the vendors´ solicitors dated 26 November, stating they were terminating the agreement with immediate effect. The sum of RM73.4 million paid earlier, together with accrued interest, was forfeited as liquidated images.
IOI Corporation said it is currently seeking seeking legal advice as to the propriety and quantum of the aforesaid forfeiture.
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