IWH OFFERS TO MERGE WITH IWC
Group to take up 61.7pc of Iskandar Waterfront City, assume its listing status
ISKANDAR Waterfront City Bhd (IWC) has been offered to merge with its major shareholder, Iskandar Waterfront Holdings Sdn
Bhd (IWH), which will create one of Bursa Malaysia’s largest property developers with RM30 billion worth of land.
Under a proposed one-for-one merger offer, IWH will buy the remaining 61.7 per cent stake in IWC at RM1.50 a share, valu- ing the latter at RM1.24 billion based on the number of outstanding shares.
IWH will also assume IWC’s listing status. The proposal puts an end to the original plan to list IWH separately.
The RM1.50 offer price represents a 14 per cent premium over IWC’s 30-day volume weighted average price up to March 3.
IWH said in a statement yesterday the IWC board has 30 days until April 19 to deliberate on the merger.
“Upon completion of the proposed merger, IWH will assume the listing status of IWC on the Main Market of Bursa Malaysia, which will see the establishment of one of the largest listed strategic master property developers,” it added.
In line with the proposed merger, IWH will undertake a restructuring with executive vice-chairman Tan Sri Lim Kang Hoo via internal rationalisation of minority stakes within the IWH group and various Johor state entities.
This includes Kumpulan Prasarana Rakyat Johor Sdn Bhd, the investment arm of the Johor state government, to consolidate landbank under IWH.
Lim reportedly holds a 63.15 per cent stake in IWH through his 90 per cent-controlled Credence Resources Sdn Bhd, while KPRJ owns the remaining 36.9 per cent.
The restructuring will see an injection of 1,454ha of land with an open market value of RM4.1 billion into IWH.
All assets injected will be at a two per cent discount over the open market value as assessed by independent valuers.
The asset injections will be satisfied via issuance of new IWH shares at RM1.50 each and IWH redeemable convertible preference shares (RCPS).
The RCPS are convertible by surrendering two RCPS for a share at RM3 per conversion price upon IWH generating a cumulative net profit of more than RM1 billion post-restructuring.
Subsequently, IWH will have a total landbank of more than 2,995ha here and in Johor Baru. The estimated open market value of the landbank is about RM30 billion.
On completion of the merger and restructuring, IWH’s expanded share capital is expected to be more than 4.3 billion units.
The proposed listing of the IWH group will allow investors to participate in one of the largest property companies in Malaysia with immense potential in the region, it said.
“This provides the opportunity to invest in the strategic landbank located in the prime areas of Iskandar Malaysia Waterfront and Bandar Malaysia. With these iconic projects, IWH is well-positioned to unlock greater value and generate sustained earnings over the long-term,” it added.
IWC will start trading today after a three-day suspension. The stock closed at RM1.64 last Friday.