Re­tire­ment fund will ac­quire 8 plots mea­sur­ing 1.445m sq ft and take 66.1m new shares in com­pany

New Straits Times - - Business - FRAN­CIS DASS KUALA LUMPUR bt@me­di­

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.

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