Sime proposes to sell 10% in E&O for RM342mil

PETALING JAYA: Sime Darby Bhd has proposed to dispose its 10% stake in Eastern & Oriental Bhd (E&O) to Paramount Spring Sdn Bhd for RM342mil as part of its asset monetisation plan.

E & O group managing director Datuk Seri Terry Tham Ka Hon is an indirect substantial shareholder Paramount Spring.

The 10% stake comprises 125.9 million ordinary shares and all 48.7 million convertible warrants valued at RM2.60 and 30 sen respectively.

“The share sale forms part of our rationalisation of property investments taking into account opportunities for future growth in areas of strategic significance. The transaction reflects Datuk Seri Terry Tham’s commitment to the long term future and success of E&O,” said Sime Darby president and group chief executive Tan Sri Mohd Bakke Salleh in statement yesterday.

Following the sale, Sime Darby remained a shareholder of E&O with a stake of 12.2% and it will continue to have board representation in the property developer.

According to Sime Darby filing, the disposal consideration was arrived at on a willing buyer-willing seller basis after taking into consideration the prevailing market stock price of E&O share price and the company’s average cost of investment of approximately RM2.05 per share totalling to RM257.7mil.

“The proposed disposal is part of the Sime Darby group asset monetisation exercise, the company is expected to record a gain of approximately RM46.9mil.

“The proceeds from the proposed disposal will be utilised for working capital purposes,” it said.

The share sale agreement between Sime Darby Nominees Sdn Bhd, a wholly-owned subsidiary of Sime Darby and Paramount Spring shall take place within three months.

Meanwhile, E &O said Tham has reinforced his commitment in the property development group by increasing his interest from 11% to 21% from this deal.

With this acquisition, Tham becomes the single largest shareholder of the Group.

“This move to increase my stake in the company is a reflection of my continued conviction and confidence in the E&O Group and the brand that has been built through the years. I strongly believe that the Group has tremendous potential and I am keen to participate in its long-term growth trajectory.”

“On the back of the success we have achieved at Seri Tanjung Pinang Phase 1, our Phase 2 project (STP2) is underway with initial mobilisation works in progress upon securing all necessary authorities’ approvals.

“This is a catalyst project for E&O, as it is significant for Penang, and I am keen to be even more involved in bringing its concept masterplan to reality,” said Tham in a statement.