Key events at PKFZ

March 24, 1999: Cabinet approves project on the condition that agreement of Finance Ministry is obtained on the funding structure.

June 12, 2001: Finance Ministry directs that land should be compulsorily acquired and recommends development cost be funded by PKA issuing government-guaranteed bonds.

Dec 12, 2001: PKA board considers option of direct purchase for the acquisition of land.

Oct/Nov 2002: Cabinet approves direct purchase of land on an deferred payment terms and on the basis the project will be self-financing.

Nov 12, 2002: PKA purchases land (LA1) from KDSB for RM1.08 billion repayable by 2017 at 7.5% pa interest. PKA commits to engage KDSB as developer for first 400 acres for RM350 million–RM400 million under a separate
agreement.

Jan 2003: KDSB commences infrastructure works on land.

Feb 27, 2003: PKA signs development agreement (DA1) with KDSB to develop first 400 acres for RM400 million.

May 26, 2003: Supplemental agreement revising DA1 terms to facilitate KDSB to raise funds.

May 28, 2003: Transport Minister issues letter of support relating to LA1.

July 30, 2003: KDSB through Special Port Vehicle Bhd (SPV) issues RM1.3 billion PDS, secured against payments from LA1.

March 27, 2004: Supplemental agreement to LA1 expanded commitment to engage KDSB to develop the project from between RM350 million and RM400 million for 400 acres to RM1 billion for 1,000 acres.

Supplemental agreement to DA1 expanding KDSB’s scope to develop 1,000 acres in a single phase for estimated RM1 billion repayable by 2012 at 7.5% pa interest.

April 23, 2004: Transport Minister issues letter of support relating to development agreement (DA).

May 27, 2004: The Auditor-General in 2003 financial statements stated that PKA did not have sufficient financial resources to meet its obligations.

June 2004: Construction works start.

Nov 3, 2004 to Aug 8, 2006: KDSB through Transshipment Megahub Bhd (SPV) issues RM1.4 billion private debts securities (PDS) secured against DA.

June 23, 2005: In PKA’s 2004 financial statements, the Auditor-General opines that PKA should work towards obtaining funds to repay the obligations.

Nov 30, 2005: PKA awards additional development works (ADW1) package for RM510 million repayable by 2011 at 5% pa interest.

Dec 8, 2005: Transport Minister issues letter of support relating to additional development works (ADW).

March 30, 2006 to Dec 12, 2008: KDSB through Valid Ventures Bhd (SPV) issues RM545 million PDS secured against ADW.

April 26, 2006: Revises interest rate in ADW1 from 5% pa to 7.5%.
PKA awards new additional development works (NADW) package to KDSB for RM336 million repayable by 2010 at 7.5% pa
interest.

May 23, 2006: Transport Minister issues letter of support relating to NADW.

May 30, 2006: In PKA’s 2005 financial statements, the Auditor-General opines that PKA need to look for sources of financing to meet its capital obligation.

Sept 26, 2006: KDSB through Free Zone Capital Bhd (SPV) issues RM410 million PDS, secured against NADW.

Nov 2006: PKFZ launched.

June 2007: Government rectified development cost of RM1.8 billion.

June 20, 2007: In PKA’s 2006 financial statements, the Auditor-General states that based on PKA’s limited financial resources, it should look for sources of financing to meet its capital obligation.

July 2007: Finance Ministry approves RM4.6 billion soft loan to PKA towards meeting its financial obligations, including those to bondholders.

30 June 2008: PKA signs loan agreement for RM920 million with
government.


*** PKA paid out RM510 million in 2007, RM660 million in 2008, and RM660 million in 2009 to bondholders. PKA is scheduled to make a total payment of RM723 million for 2010, including RM350 million by yesterday. The remaining RM373 million is to be paid to bondholders by July 31.


Written by Financial Daily
This article appeared in The Edge Financial Daily, July 1, 2010.