E&O shareholders approve land sale to KWAP

PETALING JAYA: Eastern & Oriental Bhd (E&O) shareholders approved the disposal of a portion of development land at Seri Tanjung Pinang Phase 2 (STP2) to Kumpulan Wang Persaraan (Diperbadankan) (KWAP) at an EGM yesterday.

Its subsidiary Tanjung Pinang Development Sdn Bhd (TPD) is selling 20% of net development land measuring 1.445 million sq ft on Phase 2A of STP2 (STP2A) for RM766.02 million cash.

STP2A has a total gross area of about 250 acres and is the first phase of the 760acre STP2 reclamation project in Penang island, for which TPD has been granted the concession rights to reclaim and develop.

A special purpose vehicle (SPV) Persada Mentari Sdn Bhd (PMSB), has been formed for the partnership between TPD and KWAP. TPD and KWAP will each hold 80% and 20% in the SPV respectively.

“The sale of the land will enable the group to unlock the value of our investment in STP2A, realise capital appreciation of the land and partially monetise our investment in STP2A. Importantly, this allows the group to further reinvest into the development of STP2A,” said E&O managing director Kok Tuck Cheong.

The group will use the proceeds from the land disposal to meet the funding requirements for STP2A reclamation and infrastructure works.

E&O’s share price fell 1.24% to close at RM1.60 yesterday with a total of 892,600 shares traded, giving it a market capitalisation of RM2.11 billion.