Listing of IWH on the cards
Impending corporate exercise with IWC to position developer as builder of cities
PETALING JAYA: A corporate exercise between Iskandar Waterfront City Bhd (IWC) and its parent company, Iskandar Waterfront Holdings Sdn Bhd (IWH), is likely to be announced, following the suspension of IWC last Friday.
The exercise, which sources said is not likely to be a backdoor listing for IWH, is likely to involve a share swap between the two companies that own vast tracts of land in cities.
“IWC’s land bank is principally on the waterfront of Johor Baru, while IWH is the master developer of Bandar Malaysia. There are synergies between the two, as both are developers of land in the city. The corporate exercise will position IWH as the master developer of cities,” said a source.
It is learnt that the proposed corporate exercise, which is expected to be announced by tomorrow, is the first major step towards the listing of IWH that is planned for the end of the year.
IWC has requested for a suspension for three market days beginning yesterday, pending the release of a material announcement.
Shares of IWC have shot up over the last two weeks since speculation that a listing of IWH was on the cards via IWC began.
As of Jan 31, IWC was steadily hovering at the 90-sen level. It had since shot up to RM1.64 just before its suspension last Friday.
Contractor-turned-property developer Tan Sri Lim Kang Hoo is the major shareholder in both IWH and IWC through his private company Credence Resources Sdn Bhd.
Credence is the major shareholder in IWH with a 63% stake, while the remaining shares are held by state-owned Kumpulan Prasarana Rakyat Johor.
IWH holds all the waterfront land in Danga Bay and also has a 60% interest in the Johor Baru Central Business District Development. IWH also has a 47.6% stake in IWC.
IWH is a much bigger entity than IWC, as it is the master developer of the 4,300-acre Danga Bay waterfront city in Johor. It is also the master developer and part-equity owner of the iconic Bandar Malaysia located in the heart of Kuala Lumpur on a 486-acre site in Sungai Besi.
The Bandar Malaysia project is the crown jewel of IWH.
When IWH first attempted a listing in 2013, it was said to be looking to raise between US $800mil (RM 2.48bil) and US$1bil (RM3.11bil) for its initial public offering.
But that was based entirely on its 4,300 acres of waterfront land in Danga Bay, Johor Baru.
Almost half the land was under water and being reclaimed in phases. Today, 80% of that land has already been reclaimed.
In December 2015, IWH-CREC Sdn Bhd, a consortium comprising IWH and China Railway Engineering Corp (M) Sdn Bhd, executed a share sale and purchase agreement with 1Malaysia Development Bhd (1MDB) to acquire a 60% equity interest in Bandar Malaysia Sdn Bhd to jointly develop the Bandar Malaysia project for RM 7.4bil.
The remaining 40% is held by 1MDB and is likely to be transferred to the Finance Ministry. China’s construction giant China Railway Engineering Corp (CREC) formed a joint-venture (JV) company - IWH-CREC - to take over a 60% stake in the Bandar Malaysia project for RM 7.41bil.
The deal valued the 486 acres of land at RM 12.35bil. CREC owns a 40% stake in the JV, while IWH, which is controlled by Lim, owns 60%.