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More bad news for Bandar Malaysia

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China has curtailed bank loans to Dalian Wanda Group which had expressed interest in developing Bandar Malaysia, but the news causes Iskandar Waterfront City Bhd shares to rise.

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KUALA LUMPUR: The prospects of the billion ringgit Bandar Malaysia project look dim with the curtailing of the Dalian Wanda Group’s loans in China.

The Wall Street Journal reported that China’s regulators had ordered the nation’s big banks to put the brakes on loans to Dalian Wanda Group, which had been approached by Prime Minister Najib Razak to help salvage the project,

Now that its loan facilities have been curtailed, the giant Dalian Wanda Group may not be able to get involved in the project.

According to the WSJ, China’s banking regulators told executives of the country’s big state-owned lenders that six of Wanda’s foreign acquisitions were subject to government capital restrictions.

In addition, the WSJ reported, China’s government was preventing the company from using funds parked in the mainland to further finance any of these deals.

The report said this could be the reason for the company’s surprise decision last week to sell most of its theme parks and hotels to developer Sunac China Holdings Ltd.

Meanwhile, The Sun daily reported that the news of Dalian Wanda Group’s troubles caused shares of Iskandar Waterfront City Bhd (IWC) to rise as much as 24% in early morning trade.

IWC, which is to merge with Iskandar Waterfront Holdings Bhd, the previous joint venture partner of the terminated deal to purchase a 60% interest in Bandar Malaysia and the master developer, had seen lacklustre trading after Najib earlier announced that Dalian Wanda was interested in participating in the Bandar Malaysia project.

In May, Dalian Wanda Group chairman Wang Jianlin, China’s richest man, told the media in Beijing at a joint press conference with Najib that the company’s investment would be “really huge”, estimating it at more than US$10 billion (RM44 billion).

“While we have not reached an agreement yet, I am here expressing my stance,” he was reported to have said.

This happened just more than a week after the ministry of finance announced that it had terminated a deal with a consortium called ICSB comprising Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (M) Sdn Bhd (CREC).

TRX City Sdn Bhd, an entity under the Ministry of Finance Inc, said in a statement then that the share sale agreement governing the development of the 486 acres of land in Sungai Besi had lapsed because ICSB had failed to meet the payment obligations despite being granted repeated extensions. But this was contested by ICSB.

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