Ekovest to reward shareholders up to RM244.4m over Duke deal

KUALA LUMPUR: Ekovest Bhd shareholders are in for a windfall of up to RM244.41 million following its 40 per cent stake disposal in the concession holder of Duta-Ulu Kelang Expressway (Duke) for RM1.13 billion.

Ekovest said yesterday it would pay a cash dividend of 25 sen per share upon completion of the disposal.

In a circular to shareholders, Ekovest said it plans to use between 18.9 and 21.6 per cent of the gross proceeds from the deal as distribution to the shareholders. This will involve a payout of between RM213.86 million and RM244.41 million.

The proposed distribution is to reward shareholders for their support of the company, it added.

Ekovest is selling the 40 per cent stake in Konsortium Lebuhraya Utara-Timur (KL) Sdn Bhd (Kesturi) to the Employees Provident Fund.

The company will retain a 60 per cent stake in Kesturi.

The bulk of the proceeds, 35.4 per cent or RM400 million, will be used to repay borrowings. Another 28.8 to 31.5 per cent will be used for general corporate and working capital.

Ekovest said the stake sale is in line with its strategy to monetise its matured infrastructure assets and to allocate more funds for its infrastructure division expansion and other core businesses, such as the construction and property division.

The company also proposed a share split involving two existing 50 sen shares into five shares of 20 sen each. This will result in an enlarged issued and paid-up share capital of a maximum of RM488.827 million comprising a maximum of 2.44 billion subdivided shares.

“The proposed share split is expected to enhance the marketability and trading liquidity of the ordinary shares of the company on the Main Market of Bursa Securities as a result of the increase in the number of ordinary shares in issue,” said Ekovest.

The company declined to comment when contacted by Business Times but a construction analyst said the disposal could mean bigger things are in the pipeline.

“Ekovest has some 13ha of landbank in the Klang Valley and 10ha in Danga Bay, Johor Baru. As of now, only one research house has coverage on the firm, meaning that the firm has been severely undervalued as both contractor and concessionaire. This sale could thrust it into the limelight,” said the analyst.

“The company already has a 54year concession to build and operate a new 50km urban expressway, which will contribute positively to its construction division within the medium term, and I won’t be surprised that if is eyeing, or in the process of, discussing something similar.”

The analyst said Ekovest would be one of the stocks to watch out for next year.

The extraordinary general meeting for shareholders’ approval will be held on January 19.

Ekovest was up two sen to RM2.34 on Bursa Malaysia yesterday.