IGB quite active in corporate exercises


By LIEW LAI JING

FORMERLY known as Ipoh Garden Bhd, IGB Corp Bhd has always been a diversified property player; not only does it build residential units to commercial properties and hotels in the country, it also owns property investments abroad including the St Giles hotel chain in Britain and the MiCasa Hotel Apartments in Myanmar. 

The Tan brothers – Kim Yeow and Chin Nam – started Ipoh Garden back in 1964, and another property company, Tan & Tan Sdn Bhd (which was eventually renamed Tan & Tan Developments) in 1972. 

IGB initially concentrated on building houses in Perak alone. During the 1980s, IGB diversified into the hotel industry, starting with the Pan Pacific Resort Pangkor.  

In the early 1990s, IGB bought a 70% stake in Tan & Tan for RM80.5mil.  

Tan & Tan developed Desa Kudalari, the country's first condominium development, and also MiCasa and SuCasa, the first hotel apartments in Kuala Lumpur.  

At the turn of the century, IGB decided to shape up as a niche property player, and embarked on a series of corporate exercises to consolidate and streamline its businesses.  

In 2001, IGB completed a merger with Tan & Tan in a mega billion-ringgit deal which resulted in the delisting of Tan & Tan, whose listing status was taken over by Gold IS Bhd, another unit under the Tan family which manufactures pharmaceutical and healthcare products.  

The massive rationalisation exercise included the sale of non-core assets such as its holdings in IJM Corp Bhd to Tronoh Mines for RM351.4mil. 

Also for sale are its Renaissance Hotel at the junction of Jalan Sultan Ismail and Jalan Ampang in the heart of Kuala Lumpur, the Pan Pacific Pangkor Resort Hotel and its 24.6% stake in Negara Properties (M) Bhd.  

One of IGB's prized developments is the Mid Valley Megamall, which is one of the biggest success stories for shopping malls in the country, which contributes 30% of the group earnings.  

The shopping mall offers 1.5 million sq ft of retail space, is the first phase of IGB's 50-acre Mid Valley City.  

The company is planning to start constructing the second phase, which includes a new hotel, service apartments, office blocks and an additional 1.2 million sq ft of retail space. 

Construction cost is estimated at RM600mil with a target completion date of less than three years.  

An investor who had bought a 1,000 IGB shares on Jan 2, 1990 for RM4,100 would be looking at a net gain of RM272 based on the closing price of IGB shares and warrants on Dec 31, 2002. 

Over the past 13 years, IGB has announced several corporate exercises including bonus and rights issues, convertible unsecured loan stocks, transferable subscription rights and redeemable guaranteed loan stocks.  

From the initial 1,000 shares, the investor would be holding onto 5,435 shares as at end-2002. 

In the process, the investor would also have had to dip into his pocket for another RM1,601 to subscribe for some of the shares. 

Meanwhile, dividends paid out and income received from the loan stocks added up to RM1,326.  

On top of that, IGB issued warrants last year, which means the shareholder is also holding onto 724 warrants with an exercise price of RM1.  

The warrant holder has up to 2004 to exercise the warrants. 

Online financial portal Surf88.com, which has a “buy” on the developer, said its share was still undervalued with strong earnings expected in 2003 and 2004.  

“In the last two quarters, IGB's results came in above our expectations,” a Surf88.com analyst said. For the nine months ended September 2002, IGB reported a net profit of RM72.9mil compared with RM42.3mil in the previous corresponding period. Revenue also surged to RM265mil from RM149.5mil previously. 

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