The Star Online 
Business News - Wednesday April 16, 2014

PETALING JAYA: Zelan Bhd has entered into a second supplementary agreement (SSA) with Meena Holdings LLC for the settlement of disputes between both parties which include a payment of 121.64 million United Arab Emirates dirhams (RM107.39mil) to the former.

The SSA is also for the continuation of works by Zelan's unit.

In a filing with Bursa Malaysia, the company said the SSA between its unit, Zelan Holdings (M) Sdn Bhd, and Meena was to settle disputes on the Meena Plaza mixed-use development project in Abu Dhabi, United Arab Emirates.

According to the terms of the SSA, Meena and Zelan Holdings have agreed to continue with the project as stated in the contract dated April 1, 2008.

To recap, in November 2012, Zelan told Bursa Malaysia that Meena had issued a 14-day notice to Zelan Holdings to terminate the contract and to liquidate Zelan Holdings' performance bond.

Based on yesterday’s announcement, Meena has agreed to pay 121.64 million dirhams to Zelan's unit within 74 days from the date of the SSA.

The payment consists of a refund of 92.53 million dirhams (RM81.69mil) received earlier by Meena in relation to its demand on Zelan Holdings' performance bond in November 2012, as well as payment of 29.11 million dirhams (RM25.7mil) outstanding progress claims for works done due to the latter.

Additionally, the two parties have agreed to revise the contract price to 980.05 million dirhams (RM864.2mil) from the original contract price of 950.03 million dirhams (RM838.7mil), as a result of an agreed variation order for additional fit out work of some 30.02 million dirhams (RM26.5mil).

"The parties have also agreed that the contract value of works completed as at November 2012 is 464.56 million dirhams (RM410.12mil), and therefore the contract value of the remaining works to be undertaken by Zelan Holdings now is 515.49 million dirhams (RM455.08mil)," Zelan said in its filing.

In exchange of Meena payment, Zelan Holdings will provide the former with a new performance bond of 51.55 million dirhams (RM45.51mil).

This is equivalent to 10% of the balance contract price and is valid for 15 months, plus an extension of 12 months for defects liability period.

Zelan Holdings will also provide Meena with a 40.98 million dirhams (RM36.18mil) rectification bond, which is valid for 6.5 months, as performance security for basement rectification works of approximately 15 million dirhams (RM13.24mil) to be carried out by Zelan Holdings.

Zelan Holdings will recommence works on the project 30 days after the payment date. The completion period for the remaining works is 15 months from recommencement.

Back to News Archive