Malaysian Resources Corporation Bhd (MRCB) has entered into an agreement to acquire a holding company that would give it a 24.9% shareholding in major property developer UDA Holdings Bhd for RM88mil cash.
Group chairman Datuk Seri Syed Anwar Jamalullail said MRCB had signed a deal to take over the entire stake of 320,000 shares in Landas Utama Sdn Bhd, which owns nearly 25% of UDA.
Landas Utama is a special vehicle set up by the Finance Ministry to exercise management control over UDA. It is currently the second largest shareholder after Ministry of Finance Inc, which has a 50.01% controlling stake in the KLSE main board property developer.
Anwar told a press conference in Kuala Lumpur yesterday that MRCB would participate in the management of UDA following its acquisition of Landas Utama, which currently has two seats on UDAs board.
Anwar expects the purchase to be completed by March, after which UDA would become an associate company of the MRCB group. He added that MRCB would finance the acquisition with internal funds and borrowings.
He said the RM88mil purchase price was considered a good deal for MRCB. The deal valued UDA at about RM2.50 a share, representing a discount from its net tangible assets per share of RM3.40 at Sept 30, 2002.
MRCB believes that the synergies and substantial business opportunities generated will further enhance both UDAs and MRCBs value and returns to shareholders.
The acquisition of UDA is in line with MRCBs long-term strategy to be a major construction group and leading urban property developer in the country, Anwar said.
UDA, which was listed in late 1999, is involved in property management, investment, and the retail and hospitality businesses. Under its property development arm, UDA has a land-bank of 6,000 acres, scattered through the peninsula.
The company also owns some landmark commercial properties in Kuala Lumpur, such as the Bukit Bintang Plaza, Pudu Raya terminal, Sinar Kota, and Pertama shopping complex. Its other assets include the Impiana Hotel chain and UDA-Ocean department stores.
For the financial year ended Dec 31, 2001, UDA posted a pre-tax profit of RM44.9mil on turnover of RM488.3mil. For the nine months to Sept 30 last year, the group reported a pre-tax profit of RM22.5mil, with sales amounting to RM367.8mil.
MRCB executive director Shahril Ridza Ridzuan said the group, which also has significant business activities in construction and infrastructure, was targeting a recurring order book of RM1.5bil a year in a bid to reposition itself as a top five construction and infrastructure group in the next five years.
The group now has an order book of RM1bil, with projects in hand including the Sabah East-West Interconnection grid, the KL Sentral Development project II and some road upgrading jobs in Perak, Negri Sembilan, and Johor.
Shahril said MRCB was also pursuing other projects and more land-bank within the Klang Valley.
On the groups restructuring which would involve a de-merger of its media business and property and construction, he said the exercise was expected to be completed by April, subject to shareholder approval next month.
In the de-merger exercise, MRCB shareholders holding 1,000 shares would end up with 670 MRCB shares and 430 shares in a media company called Media Prima Bhd.