Eco World International completes first stage of London deal

PETALING JAYA: EcoWorld International Bhd (EWI) has completed the acquisition of the first part of a two-stage deal to jointly develop 12 project sites in Greater London and southeast London with Be Living Holdings Ltd, for £63.76 million (RM348.47 million).

The completion of the first stage of the acquisitions adds six new sites to its existing three projects in London.

The estimated gross development value (GDV) of the six sites is £1.1 billion (RM6 billion), which will bring the total remaining GDV to slightly more than double the remaining GDV of £1.01 billion from its ongoing UK projects.

EWI told the stock exchange yesterday that it has also entered into a definitive agreements for the second part of the deal, which will potentially add another six sites with a GDV of £1.5 billion.

Upon completion of the acquisition, its total number of projects in the UK will increase from three when it was listed around this time last year to 15.

“The completion of the stage one acquisitions marks the start of a new era for EcoWorld International in the UK. Going forward, we are well positioned to grow our UK business strongly to meet both local and international demand in the traditional open market sale subsector as well as rising institutional demand in the built-to-rent subsector,” EWI president and CEO Datuk Teow Leong Seng said.

Commenting on the group’s prospects, Teow highlighted that local demand in the midmainstream market currently exceeds supply.

On the financing front, EWI said the stage one acquisition was completed with proceeds raised from the group’s initial public offering (IPO) in April last year.

With regard to the stage two acquisitions, the group said its share of the estimated purchase consideration of £40.36 million (RM220.57 million) is expected to be financed with bank borrowings, other debt instruments and/or internally generated funds.

This is in view of its low gearing level of 0.05 times as at Oct 31, 2017 after taking into account the RM2.5 billion raised from the IPO.

On Bursa Malaysia yesterday, EWI ended down 2 sen or 2% at RM1, on volume of 292,900 shares.