IWH OF­FERS TO MERGE WITH IWC

Group to take up 61.7pc of Iskan­dar Wa­ter­front City, as­sume its list­ing sta­tus

New Straits Times - - Business / News - FARAH ADILLA KUALA LUMPUR farah.adilla@me­di­aprima.com.my

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.

Tan Sri Lim Kang Hoo

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