Move to turn Ekovest into con­struc­tion out­fit

Ty­coon’s plan to ra­tio­nalise as­sets may also en­large IWC’s land bank

The Star Malaysia - StarBiz - - News -

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.

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