KWAP TO BUY 20PC OF E&O’S STP 2A LAND FOR RM766M
Retirement fund will acquire 8 plots measuring 1.445m sq ft and take 66.1m new shares in company
MALAYSIA’S secondlargest retirement fund has bought 20 per cent of the development land at Eastern & Oriental Bhd’s (E&O) Seri Tanjung Pinang Phase 2A (STP 2A) project in Penang for RM766.02 million.
Following the purchase, Kumpulan Wang Persaraan Diperbadankan (KWAP), or Retirement Fund Inc, will own 20 per cent of Persada Mentari Sdn Bhd (PMSB), which will develop the land.
The remaining 80 per cent is held by Tanjung Pinang Development Sdn Bhd (TPD), a 78.78 per cent-owned subsidiary of E&O.
E&O will also undertake a proposed restricted issue of 66.1 million new shares to KWAP priced between RM1.84 and RM1.94 a share.
In an announcement to Bursa Malaysia yesterday, E&O said the land disposal comprised four plots of residential development land and four plots of commercial development land.
The eight plots, upon reclamation, measure about 1.445 million square feet.
It said the disposal would allow the group to unlock the value of its investment in STP 2A development land, realise capital appreciation of its land and partially monetise its investment.
E&O said the partnership with KWAP would allow the group to strengthen its equity base and boost the institutional shareholding in E&O.
It also offers an opportunity for E&O to develop the STP 2A land by way of collaboration with KWAP via their joint investment in PMSB.
“We are deeply honoured to partner KWAP, a highly-valued and reputable institution, in our journey to transform the concept of STP 2A into reality. The jointventure will be on a solid platform to realise the potential of the project and bring it to fruition,” said E&O managing director Kok Tuck Cheong.
“The proceeds from the proposed transaction will be utilised towards reclamation and infrastructure costs, working capital and/or the repayment of borrowings for the project.”
KWAP chief executive officer Datuk Wan Kamaruzaman Wan Ahmad said: “Entering partnership with E&O is an exciting journey and inaugurates our first equity participation into property development... E&O’s record in the industry as well as the quality of their delivery will assure the success of this project.”
TPD was granted a concession by the Penang government to reclaim and develop 307.561ha of the foreshore near Tanjong Tokong under three phases — STP Phase 2A, Phase 2B and Phase 2C. STP 2A will comprise a gross area of about 102.308ha.