UEM Edgenta to net RM500m from Opus stake sale
KUALA LUMPUR: UEM Edgenta Bhd has agreed to sell its controlling 61.2 per cent stake in New Zealand-based Opus International Consultants Ltd for more than RM500 million, a move that has been warmly received by investors.
Fuelled by the prospect of a 10 sen special dividend from the sale of Opus to Canada’s WSP Global Inc, investors pushed UEM Edgenta’s shares upwards to reverse a fall since Thursday.
UEM Edgenta’s share price closed 2.82 per cent higher to RM2.55 in brisk trade yesterday, against Friday’s close of RM2.48.
A total of 485,200 shares changed hands from just 3,100 shares last Friday.
An analyst who is positive about the move said the corporate exercise would redirect investors to jump in on buying opportunity.
UEM Edgenta said yesterday it had accepted WSP’s takeover offer for all Opus shares at NZ$1.78 (RM5.60) each. Given its 61.2 per cent stake, or 90.52 million shares, UEM Edgenta will receive NZ$161.1 million.
It will receive NZ$167.4 million in total, assuming a full dividend of NZ$0.07 per Opus share is received together with proceeds from the sale.
UEM Edgenta said the disposal of its Opus stake would enable the group to monetise its investment at a healthy premium over the market price and enable it to reduce its gross gearing to 0.4 times from 0.8 times.
Its managing director and chief executive officer Datuk Azmir Merican said proceeds from the disposal would be used to pare down debts, among others.
“It will also provide UEM Edgenta with the financial resources and enable management to focus on driving as well as supporting organic growth and operational excellence initiatives in our core sectors spanning healthcare, infrastructure and real estate in key markets, namely Malaysia, Singapore, Indonesia, Taiwan, India, other Southeast Asian countries and the Middle East,” he said in a statement.
MIDF Research head Redza Rahman said it was a good deal for UEM Edgenta, considering that besides Opus New Zealand operations, its business in other countries were suffering losses at the operating income level which had dragged the whole company into net loss since financial year 2015.
“Last year, the company had to go through two impairments for Opus Stewart Weir in Canada, a unit under Opus that was being disposed of. Therefore, due to the volatility in overseas operations, UEM Edgenta is better off without Opus,” he told NST Business.
UEM Edgentra said its major shareholder, UEM Group, had provided an undertaking to vote in favour of the proposed disposal.
The company had said it would declare and pay Opus shareholders a fully imputed cash dividend of up to NZ$0.07 per Opus share without an offer price adjustment — totalling NZ$10.4 million, or RM32.4 million. Amir Hisyam Rasid