Zelan Holdings, a Malaysian construction company, has pulled out of a Dh980-million ($267 million) mixed-use project being developed by Meena Holdings in Abu Dhabi, UAE, over non-payment issues, said a report.

An Emirati company, Meena Holdings, was set up mainly for developing the Meena Plaza project in the Port Zayed area by a number of shareholders, including the privately-owned Abu Dhabi developer Tamouh.

Zelan said it has already issued a notice to the UAE developer detailing its plan to terminate their agreement within the next 14 days, reported The National.

Meena Holdings had signed up the Malaysian firm in 2008 to build Package Two of the Meena Plaza project, comprising three apartment towers and an office tower.

The project was intended to be made up of 246,000 sq m of buildings and include a helipad, sun bathing deck, a covered Jacuzzi and wading pool, a cinema and private medical centre, said the report.

However, since the project's launch, the work had to be stopped several times, said the report citing the Malaysian company officials.

Finally in September last year, a new agreement was signed after Meena Holdings agreed to pay Zelan Dh121.63 million ($33 million), which it said was owed for work done.

As part of the deal, the contract price was revised upwards for a second time to just more than Dh980 million ($267 million).

But last week, Zelan announced that it was halting work and was looking to terminate its agreement, said the report.

In a statement to Malaysia’s stock exchange, Zelan said Meena Holdings had failed to pay Dh27.6 million ($7.5 million) for work done and materials supplied.

It also highlighted “the employer’s continuous interference with the valuation and/or certification” of its claims for money owed.

The Malaysian company threatened to take the appropriate steps to pursue its claims against the employer and recover any loss and damage arising out of the termination.