Move to turn Ekovest into construction outfit
Tycoon’s plan to rationalise assets may also enlarge IWC’s land bank
PETALING JAYA: Tan Sri Lim Kang Hoo’s plan to rationalise the property assets of the companies under his control is expected to turn Ekovest Bhd into a pure construction and infrastructure outfit, while enlarging Iskandar Waterfront City Bhd’s (IWC) land bank for immediate development.
Sources said IWC and Ekovest are expected to unveil the proposed corporate exercise today, following a meeting between the boards of both companies yesterday on the matter.
Trading in the shares of IWC and Ekovest have been suspended from yesterday, “pending the release of a material announcement”, both companies said in their separate filings with Bursa Malaysia.
IWC shares were last traded at RM1.40, while that of Ekovest were last traded at RM1.16.
Both counters will resume trading tomorrow.
For IWC, the proposed corporate exercise will represent Lim’s second attempt this year to restructure his flagship property development company.
Sources said this time, the restructuring would involve Ekovest – the property development, construction and highway infrastructure arm of companies under Lim – as the tycoon was likely aiming to rationalise the property assets of his companies.
According to sources, the exer- cise would likely involve Ekovest selling its entire land bank to IWC, which would likely be satisfied by the issuance of shares in IWC to Ekovest.
In explaining the rationale of the exercise, a source said: “At the moment, IWC’s property assets are in Johor while Ekovest properties are located largely in Kuala Lumpur. It makes sense to rationalise the assets because the Johor property play is long term in nature, while the properties in Kuala Lumpur have a faster turnaround.”
He noted that what IWC lacked at present was land for immediate development, while Ekovest already owned pockets of land for immediate development.
IWC’s major attraction is the 6,773 acres of waterfront land in Johor Baru, while Ekovest has a pocket of prime land in Kuala Lumpur that it received in return for the River of Life project.
Under the project, Ekovest was paid in land for rehabilitating sec- tions of Sungai Gombak.
“By disposing of its entire land bank, Ekovest would be turned into a pure construction and infrastructure company,” the source said.
Ekovest, which recently completed the construction of the Duta-Ulu Klang Expressway (Duke) Phase 2 project, announced yesterday that it had received the balance payment of about RM209mil from the Employees Provident Fund (EPF) for the 40% stake in Duke.
Under an agreement signed last September, the EPF would pay a total of RM921mil in cash to Ekovest upon completion of Duke 2.
In May this year, Lim announced a major restructuring to consolidate all his property assets into Iskandar Waterfront Holdings Sdn Bhd (IWH), which is the parent company of IWC.
Under the proposed deal, which did not take off, IWH would take over the remaining 61.7% stake in IWC through a share swap.
However, there was poor sentiment on IWH and stocks related to Lim when the Government took back the Bandar Malaysia project from it in August this year.
Last year, IWH, together with China Railway Engineering Corp (CREC), was awarded the job to develop the 485 acres of land in Bandar Malaysia. The Finance Ministry has a 40% stake in the joint venture, while IWH and CREC hold a combined 60%.
Prime asset: A model of Ekovest’s KL River City project. IWC’s major attraction is the 6,773 acres of waterfront land in Johor Baru, while Ekovest has a pocket of prime land in KL that it received in return for the River of Life project.