GuocoLand to take substantial stake in EWI’s IPO
KUALA LUMPUR: Eco World International Bhd (EWI), which is eyeing a listing by March 2017, has announced that Singapore-listed GuocoLand Limited will become a strategic investor in its upcoming initial public offering (IPO) together with Eco World Development Group Bhd.
EWI will be issuing up to 2.15 billion new shares or an 89.7% stake in its IPO. GuocoLand and Eco World will subscribe for a 27% stake each in EWI. About 18.7% will be for institutional offering and 17% for retail offering.
The remaining 10.3% is to be held by EWI executive vice-chairman Tan Sri Liew Kee Sin.
The proposed listing and IPO of EWI is targeting to raise over RM2 billion to fund the development of four projects in London and Sydney.
The price at which the new IPO shares will be issued has not been fixed and will largely be determined by way of book-building process where prospective institutional and selected investors will be invited to bid for the IPO shares.
Liew said EWI can tap into GuocoLand’s financial strength, potential landbank opportunities and access the customer base of GuocoLand in Singapore and China.
“Going forward, GuocoLand will not be just a strategic investor. GuocoLand will be a full-fledged partner. Without GuocoLand, we won’t go far. Our aim of bringing in GuocoLand is for them to be a fullfledged partner so that the brand of Eco World and GuocoLand can go together hand in hand. We’re competing in an international environment,” Liew said at the signing ceremony here yesterday.
GuocoLand, which is a member of the Hong Leong Group, is a property company operating in Singapore, China, Malaysia and Vietnam and has been on the lookout for expanding into new markets to further grow its real estate development business.
“The UK and Australia property markets offer scalability and we believe that with the right products and locations, they offer reasonable returns,” said GuocoLand group president and CEO Raymond Choong.
The investment in EWI gives GuocoLand immediate exposure to four development projects in London and Sydney with an estimated total gross development value of £2.4 billion (RM12.2 billion). As at Oct 3, 2016, the cumulative sales including reserved units from the four projects are £1 billion.
The investment by GuocoLand will be funded by internally generated funds and is within GuocoLand’s financial capability.
Eco World and GuocoLand can nominate three directors each to the board of EWI.
EWI will continue to focus on property development outside Malaysia while Eco World will concentrate on growing its development business within Malaysia. – by Ee Ann Nee