This proposed merger and proposed asset injections will lead to the IWH group having a total land bank of over 7,400 acres in Johor Baru and Kuala Lumpur with an estimated open market value of RM30bil.
In a filing with Bursa Malaysia, IWCity said the corporate exercise would involve a 1-for-1 exchange of all IWCity shares held by existing shareholders (excluding IWH) with subdivided IWH ordinary shares to be done under a scheme of arrangement based on an offer price of RM1.50 per share.
The price, it said, represents a premium of 14% over the 30-day volume weighted average price of IWCity shares up to March 3.
IWH - which owns 3,900 acres of land bank in Johor and is the master developer and part-equity owner of Bandar Malaysia in Kuala Lumpur - had on Wednesday inked a heads of agreement with IWH and IWCity executive vice chairman Tan Sri Lim Kang Hoo to undertake the proposed merger scheme. Lim is IWH’s controlling shareholder through Credence Resources Sdn Bhd.
The scheme entails the proposed capitalisation of the existing redeemable convertible preference shares in IWH currently held by Credence Resources and its only other shareholder, Johor state’s investment arm Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ), into 1.366 billion new IWH ordinary shares at an issue price of RM1 for each new IWH ordinary shares.
A share split will follow, with each of those ordinary shares being subdivided into two shares. This will result in IWH’s share capital expanding to 2.8 billion shares.
At the same time, IWH will undertake a restructuring exercise whereby it will acquire identified companies and/or identified real properties from Lim and his related parties for RM2.52bil, from KPRJ and its related parties for RM519.4mil, and from Johor’s Sultan Ibrahim Sultan Iskandar and/or his connected parties/companies for RM832.96mil.
All the asset injections, totalling RM3.87bil, will be satisfied with new IWH ordinary shares and new IWH redeemable convertible preference shares (RCPS) at an issue price of RM1.50 each.
IWH will also offer to buy the rest of the shares in 71.45%-owned subsidiary Iskandar Waterfront Sdn Bhd for RM2.6bil to be satisfied with new IWH ordinary shares and RCPS at an issue price of RM1.50 each.
According to a press statement, the enlarged IWH group will have a sizeable land bank of about 7,400 acres in the central business district of both Johor and Kuala Lumpur under a single listed entity. It will mitigate potential conflict of interest involving Lim, who is the ultimate controlling shareholder of IWH, and transform the IWH group into one of the largest public-private entities listed on Bursa Malaysia.
The board of IWCity has been given until April 19 to deliberate on the proposed merger offer.
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