Magma’s land buy for a Tioman resort lapses after four years, citing unmet conditions
The hospitality operator said both agreements — SPA 1 and SPA 2, dated Dec 11, 2020 — had automatically lapsed as of Dec 31, 2024, due to the non-fulfilment of the agreed conditions within the stipulated time frame and the absence of any further extension.
KUALA LUMPUR (April 11): Magma Group Bhd (KL:MAGMA), formerly known as Impiana Hotels Bhd, announced that its proposed acquisition of five parcels of land in Tioman Island for the development of a resort has lapsed, following the expiry of conditions precedent set out in the sale and purchase agreements (SPAs).
The hospitality operator said both agreements — SPA 1 and SPA 2, dated Dec 11, 2020 — had automatically lapsed as of Dec 31, 2024, due to the non-fulfilment of the agreed conditions within the stipulated time frame and the absence of any further extension.
The announcement, made by UOB Kay Hian on behalf of Magma via a bourse filing on Friday, did not disclose which conditions were unmet, despite the conditional period having been extended several times.
The deals, worth a combined RM7.5 million, involved the acquisition of three freehold parcels and two leasehold parcels of land in Tioman Island from Impiana Tioman Sdn Bhd — a company controlled by Magma’s former executive chairman Datuk Seri Ismail @ Farouk Abdullah. The acquisition was to be satisfied via the issuance of new shares.
The acquisition had previously been deemed a related party transaction due to Farouk’s substantial shareholding and executive role in both Magma and the vendor company.
Magma had intended to develop a resort comprising 35 to 40 villas, a jetty, spa facilities, and a dining outlet on the land. The proposed development was projected to carry a gross development cost of RM40 million, to be funded through a mix of borrowings and internal funds.
Magma assured that the lapse of the acquisition agreements is not expected to have a material impact on its financial performance. It also said it remains committed to expanding its portfolio.
“Moving forward, the board will consider other opportunities to grow the group’s portfolio of hotels and resorts, including potential acquisitions of strategic properties that align with its long-term vision,” it said.
Magma had previously disclosed on Aug 20, 2024 that its 75%-owned Impiana Selo Tioman Resorts Sdn Bhd was facing a lawsuit from two individuals over an alleged breach of an SPA in 2022 involving five parcels of land in Tioman. The plaintiffs were claiming a sum of US$974,968 (RM4.59 million), citing a lack of progress in the proposed development.
The matter was settled less than two months later, when Magma announced that a consent judgement had been recorded from both parties in the suit in September as final settlement of the case.
According to its website, Magma currently manages Impiana Hotel Ipoh, Impiana Hotel Senai, Impiana KLCC Hotel, and WOLO Kuala Lumpur.
Shares in Magma ended half a sen or 2% lower at 24.5 sen on Friday, giving the company a market capitalisation of RM296.57 million.
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Source: EdgeProp.my
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