Magna Prima Takes Over RM700 Million 8 Conlay Rehabilitation

Magna Prima Steps In To Complete 8 Conlay

Magna Prima Bhd is proposing to take over and complete the long-stalled 8 Conlay mixed-use development in Kuala Lumpur through a restructuring exercise capped at RM700 million.

Its wholly owned subsidiary, Permata Juang (M) Sdn Bhd, has entered into a rehabilitation agreement with the project’s original developer Damai City Sdn Bhd and a newly designated special-purpose vehicle, Delta 8 Sdn Bhd.

Under the arrangement, Delta 8 will hold the land and development assets, while Permata Juang will receive exclusive rights to finance, construct and commercialise 8 Conlay.

Importantly, Magna Prima’s unit will not acquire legal title to the land.

Instead, it will take over as developer under the existing purchasers’ sale and purchase agreements, effectively replacing Damai City in the project’s completion and commercialisation.

The restructuring is expected to be completed by the first half of 2027, subject to court approval, shareholder consent, secured lender approval and other conditions.

A RM700 Million Rehabilitation Structure

The transaction is not structured as a conventional cash acquisition.

Permata Juang will assume liabilities of up to RM700 million owed by Delta 8 to Damai City.

These liabilities will be satisfied through the issuance of RM700 million in redeemable secured loan securities rather than cash.

The securities will be issued to a security trustee for the benefit of Malayan Banking Bhd and Bank Pembangunan Malaysia Bhd, which are the secured lenders involved in the restructuring.

Magna Prima will also provide a corporate guarantee over Permata Juang’s payment obligations under the securities.

In addition, Permata Juang will pay a separate RM70 million cash covenant.

RM14 million was paid before the rehabilitation agreement was signed, RM21 million was paid upon signing, and the remaining RM35 million is due upon completion.

This means Magna Prima is taking on a significant financial commitment even though it will not own the land directly.

Why Magna Prima Does Not Take The Land Title

One of the more unusual elements of the deal is the separation between land ownership and development rights.

Delta 8 will hold the land and development undertaking after taking over the assets from Damai City.

Permata Juang, meanwhile, will control the rehabilitation, financing, construction and commercialisation of the project through exclusive development rights.

This structure allows the project assets and secured lender arrangements to remain within a dedicated vehicle while Magna Prima focuses on completion.

For buyers, the important point is that Permata Juang is intended to replace Damai City as the developer under existing sale agreements.

The legal effectiveness of this arrangement still depends on the scheme of arrangement and relevant approvals.

Until those conditions are satisfied, the rehabilitation should still be viewed as proposed rather than fully completed.

8 Conlay Remains Partially Built

8 Conlay sits on approximately 3.65 acres of freehold land in central Kuala Lumpur.

The development comprises Tower A, Tower B, a hotel tower and suites, together with a retail podium.

Construction was disrupted following contractor disputes and the financial deterioration of the original developer.

Based on costs already incurred, Magna Prima disclosed that the retail podium is approximately 70.21% complete.

Tower A is about 64.69% complete, while Tower B is at 49.61%.

The hotel component is about 45.91% complete, while the hotel suites remain at only 22.34%.

These figures show that the project is not an abandoned site at an early construction stage.

A significant amount of physical work has already been completed, particularly in Tower A and the retail podium.

However, completing a partially constructed luxury development can be more complex than starting from an empty site.

Magna Prima will need to assess existing structures, outstanding contractor works, defects, warranties, M&E systems and the condition of materials already installed.

Existing Buyers Are Central To The Rehabilitation

Damai City had previously sold 404 units in Tower A and 160 units in Tower B under signed sale and purchase agreements.

This means at least 564 existing purchasers have a direct interest in the outcome of the rehabilitation.

Their position makes 8 Conlay fundamentally different from a distressed land acquisition where a new developer can simply redesign the project and relaunch from scratch.

Permata Juang will need to work within the contractual framework of existing purchasers while also completing the remaining development.

Issues such as construction timelines, specifications, handover arrangements and any changes to the original project will therefore require careful management.

For existing buyers, the appointment of a new rehabilitation developer may provide a clearer pathway towards completion.

However, the process is not immediate.

The restructuring still needs to pass through court, shareholder and lender approval before Magna Prima can fully implement the rehabilitation plan.

The Project Has Been In Distress For Several Years

8 Conlay was originally launched in 2015 by KSK Land, the property arm of KSK Group.

The project was positioned as a high-end integrated development featuring distinctive twin residential towers close to Pavilion Kuala Lumpur.

GDB Holdings was appointed as main contractor in November 2020 under a RM1.25 billion contract.

Construction progressed initially, with Tower A reaching structural completion by late 2021.

The relationship deteriorated in 2022 following payment disputes.

Work stopped, both sides commenced legal action, and GDB’s contract was eventually terminated in April 2023.

Conlay Construction was appointed as replacement contractor in mid-2023 with a revised completion schedule, but no meaningful public progress followed.

Adjudication decisions between 2023 and 2025 reportedly favoured GDB for tens of millions of ringgit, while winding-up proceedings continued against KSK Land.

Receivers and managers were appointed over the project assets in January 2024.

Damai City was subsequently placed into liquidation, further weakening the likelihood of the original developer completing the project without a restructuring.

Court Approval Is Essential

The rehabilitation is being structured through a scheme of arrangement under Section 366 of the Companies Act 2016.

The scheme is to be proposed by Damai City’s receivers and managers and must be sanctioned by the High Court of Malaya.

This is one of the most important conditions attached to the deal.

The restructuring cannot simply proceed based on the agreement between the parties.

Court approval is needed to formalise how the existing liabilities and creditor claims are treated.

Consent from Maybank and Bank Pembangunan Malaysia is also required because they are secured lenders.

Magna Prima shareholders must approve the transaction as well.

A private caveat currently registered against the land must also be removed.

These conditions must initially be satisfied within three months of the agreement, although the period can be extended by a further three months.

Any longer extension requires mutual consent.

Shareholder Approval Is Required

The transaction is large relative to Magna Prima’s existing balance sheet.

Under Bursa Malaysia’s Main Market Listing Requirements, the highest percentage ratio for the exercise is 214.85%, based on the RM700 million entitlement against Magna Prima’s latest audited net assets.

This means the proposal must be approved by shareholders at an extraordinary general meeting.

The size of the transaction is material.

Although Magna Prima will not pay RM700 million entirely in cash upfront, the RSLS structure creates a substantial financing obligation.

Shareholders will therefore need to assess the potential development upside against the additional leverage and execution risk.

Gearing Could Rise To 1.99 Times

Magna Prima’s gearing stood at nil at the end of 2025.

Following issuance of the RM700 million secured loan securities, gearing is expected to rise to approximately 1.99 times.

That is a major change in the group’s financial profile.

The rehabilitation could create significant future earnings if 8 Conlay is successfully completed and remaining inventory is commercialised.

However, higher leverage also increases financial risk.

Interest obligations, construction expenditure and the cost of completing a distressed luxury project will need to be carefully managed.

The transaction is therefore not simply an opportunity to acquire a high-profile Kuala Lumpur development.

It is also a large balance-sheet commitment.

RM721 Million Independent Valuation

The RM700 million restructuring cap was set with reference to an independent valuation of the land and existing structures.

The property was valued at RM721 million as at June 23, 2025 using the residual method.

A residual valuation estimates the value of a development site by considering the expected end value of the completed project less development costs, financing, profit and other expenses.

This approach is commonly used for development land and partially completed projects.

The valuation provides a reference point for the transaction, but the actual economics will ultimately depend on completion cost and future sales.

If rehabilitation costs rise significantly or unsold units prove difficult to sell at expected prices, the development margin could narrow.

Location Remains One Of 8 Conlay’s Strongest Assets

Despite its financial and construction history, 8 Conlay occupies a strong central Kuala Lumpur location.

The project sits near Jalan Conlay, Pavilion Kuala Lumpur, KLCC, Bukit Bintang and several major hospitality and commercial destinations.

This location was one of the original reasons the project attracted buyers.

A completed 8 Conlay would enter a mature luxury residential market with established tourism, retail and business demand.

However, the Kuala Lumpur luxury market has also evolved substantially since the project was first launched in 2015.

Newer developments have entered KLCC, TRX, Bukit Bintang and Jalan Kia Peng.

This means Magna Prima cannot rely only on the original project positioning.

Any remaining unsold units will need to compete against newer products, while existing buyers will expect the completed development to remain consistent with its premium promise.

Rehabilitation Requires More Than Restarting Construction

A stalled project carries technical and commercial challenges that differ from a normal development.

Magna Prima will need to determine the condition of completed structures and services after prolonged disruption.

It may need to reappoint contractors, update building systems, replace materials or redesign certain unfinished components.

Construction costs have also changed since the original contracts were signed.

Labour, materials, financing and compliance requirements may now be more expensive.

The hotel and hospitality components could present an additional challenge because the source does not confirm whether the original operator or brand arrangements remain in place.

Magna Prima will therefore need to provide a clearer rehabilitation timeline and operational plan once the restructuring becomes unconditional.

What Existing Buyers Should Watch

The first milestone is High Court approval of the scheme of arrangement.

The second is shareholder and secured lender consent.

The third is removal of the private caveat and formal completion of the restructuring.

After that, buyers should watch for the appointment of contractors and a revised construction programme.

A detailed completion timeline will be critical.

Purchasers should also monitor whether original specifications, unit layouts, facilities and contractual commitments remain unchanged.

Any revised plan should clearly explain how existing SPA obligations will be honoured.

The most important evidence will ultimately be sustained physical construction progress after years of uncertainty.

What Magna Prima Shareholders Should Watch

For shareholders, the rehabilitation offers potentially substantial development upside but introduces significantly higher leverage.

The group is moving from zero gearing to an expected 1.99 times following issuance of the RSLS.

The key question is whether the value remaining in 8 Conlay is sufficient to justify that financial exposure.

Remaining unsold inventory, development costs, financing charges and the time required to complete the project will determine the eventual return.

The RM721 million independent valuation provides one benchmark, but a stalled project can carry hidden completion costs that are difficult to estimate before detailed technical work begins.

Magna Prima’s ability to finance construction without creating excessive strain on its other developments will therefore be important.

Conclusion: 8 Conlay Gets Its Clearest Rehabilitation Path Yet

Magna Prima’s rehabilitation agreement provides 8 Conlay with one of its most concrete potential rescue plans since construction stalled several years ago.

Under the proposed RM700 million restructuring, Permata Juang will take over as developer, finance and complete the project, while Delta 8 retains legal ownership of the land.

The arrangement also brings existing purchasers directly into the rehabilitation framework because Permata Juang will assume the developer role under their existing sale agreements.

For buyers, this creates a possible route towards eventual completion after years of uncertainty.

For Magna Prima, the opportunity is much larger but also riskier.

Taking on 8 Conlay could add a landmark central Kuala Lumpur development to its portfolio, but it will also raise the group’s gearing substantially and require careful management of construction, creditors, existing buyers and unsold inventory.

The next meaningful milestone is not a relaunch. It is whether the scheme receives court, lender and shareholder approval and whether actual construction can restart under a credible new completion programme.