FIABCI Malaysia’s Property Man of the Year 2015. Tan Sri Lim Kang Hoo
KUALA LUMPUR: Iskandar Waterfront Holdings Sdn Bhd (IWH) is going ahead with the proposed merger with associate Iskandar Waterfront City Bhd
(IWCity), disclosing on Friday that the enlarged entity may also raise as much as RM6bil through debt issuance and private placement.
IWH, which will assume IWCity’s listing status, will also be injected with RM4.3bil worth of property assets spanning 1,456ha.
In a filing with Bursa Malaysia, IWCity said it had sealed a merger agreement on Friday with IWH and IWCity’s two other substantial shareholders, Credence Resources Sdn Bhd and Johor state government investment arm, Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ).
The proposed merger is part of the IWH group’s proposed rationalisation and restructuring exercise that also involves a 1-into-2 IWCity share split and IWH buying the remaining 61.7% stake in IWCity at RM1.50 per IWCity share, to be satisfied by issuing IWH shares on the basis of one new IWH share for one existing IWCity share.
IWCity said the proposed merger scheme was expected to be completed by the first quarter of next year.
IWH also proposed to enter into several sale and purchase agreements to buy properties worth RM4.3bil in Johor controlled directly or indirectly by IWH executive vice chairman Tan Sri Lim Kang Hoo as well as those owned by KPRJ and other Johor state entities.
It was previously reported that IWH would include its 30% stake in the Bandar Malaysia project as part of its proposed corporate exercise to take over the listing status of IWCity. However, the Finance Ministry’s unit TRX City Sdn Bhd this week announced that the Bandar Malaysia development agreement with IWH and China Railway Engineering Corp (M) Sdn Bhd had lapsed.
In connection with the proposed merger and/or restructuring exercise, IWH is proposing to undertake a fund-raising exercise.
It plans to do a private placement of about 10% of IWH’s enlarged issued share capital to address the public shareholding spread requirement and repay the borrowings of the enlarged IWH group. It also proposed to issue RM3bil to RM5bil worth of bonds, convertible bonds or other debt securities.
The issue price of the placement shares has not been decided. However, based on the assumption of RM2.80 per share (the assumed price given in the statement), the group would raise up to RM1.23bil.
In a separate filing with the stock exchange, IWCity said it had revised its agreement with China-based Greenland Holdings Group Ltd, its partner in a waterfront city project in Johor with an estimated gross development value of RM18.4bil.
IWCity’s unit Tebrau Bay Sdn Bhd yesterday inked a supplemental agreement with Greenland Tebrau Sdn Bhd (GTSB), the special-purpose vehicle to undertake the mixed development, on the disposal of its 128-acre partially-submerged land in Plentong, Johor Baru, to GTSB for RM2.4bil.
GTSB is 20% owned by IWCity (through unit Southern Crest Development Sdn Bhd) and 80% by the Greenland group (via Greenland Malaysia Real Estate Operator Sdn Bhd).
GTSB has proposed a change in the sequence of tranche completion to facilitate changes to the development plan for the land.
Another amendment is that the disposal consideration for each land tranche will be subject to obtaining the approvals required under Section 433B of the National Land Code Act (required for purchase by a foreign company) and the completion of the land reclamation before the date stipulated for the payment by GTSB for the respective lots.
Previously, the payment was subject to the condition precedents for each land tranche having been met and the release of the subdivided titles for each land tranche by Tebrau Bay to Greenland.
The proposed land disposal is expected to be completed by the second quarter of 2020. Under the original agreement, the disposal was to be fully completed by the first quarter of next year.
Limited time offer:
Just RM5 per month.
