KUALA LUMPUR: UEM Sunrise Bhd and Eco World Development Bhd have received a letter from UEM Group Bhd proposing for a merger into an enlarged group.
In a filing with Bursa Malaysia Monday, EcoWorld said it had on Oct 2 received a letter from UEM Group, proposing for the board to consider and deliberate on the proposed merger.
“The proposed merger is envisaged to be carried out via an exchange of shares and warrants held by EcoWorld Malaysia’s shareholders and warrant holders into new shares and new warrants of UEM Sunrise respectively,” it said.
“The board will convene in the near term to deliberate on the proposed merger and will make a further announcement thereafter,” EcoWorld added.
In a separate filing, UEM Sunrise said the board will deliberate on the proposal and decide on the next course of action. Accordingly, a further announcement will be made in due course.
The proposed merger is envisioned to bring together the strengths and capabilities of UEM Sunrise and EcoWorld, according to the letter from UEM Group.
“Upon completion of the proposed merger, EcoWorld will become a wholly-owned subsidiary of UEM Sunrise and will be delisted from the Main Market of Bursa Malaysia Securities Bhd,” UEM Group said.
The proposed merger will be carried out via an exchange of shares and warrants. The holders of shares and warrants in EcoWorld will exchange their shares and warrants in EcoWorld respectively for new shares and warrants of UEM Sunrise, thereby becoming the holders of shares and warrants in the enlarged UEM Sunrise.
UEM Group said given subdued macro-economic conditions and market headwinds, believed that there is a pressing need for industry players to consolidate resources and capabilities to strengthen performance and sustainability.
“The merger of UEM Sunrise and EcoWorld will enhance the merged entity's scale, diversification and execution capabilities to create a robust business platform for future development. This will in turn lead to greater value creation for the current shareholders of UEM Sunrise and EcoWorld going forward,” it said.
“We envisage that upon the completion of the proposed merger, the enlarged UEM Sunrise group will focus on property developments within Malaysia and the planned developments onlands owned by UEM Sunrise that is outside of Malaysia. This will allow the enlarged UEM Sunrise group to stay focused on property developments within Malaysia, UEM Group said.
As at Sept 25, UEM Sunrise is 66.1% owned by UEM Group, a wholly-owned subsidiary of Khazanah Nasional Bhd.
“We envisage that upon the completion of the proposed merger, Khazanah, through UEM Group, will remain as the single largest shareholder of the enlarged UEM Sunrise, followed by the significant shareholders of EcoWorld on a collective basis,” it said. UEM Group has also proposed for or the board of directors of the enlarged UEM Sunrise to be led by a "chairman" who is an existing board member of UEM Sunrise.
“We envisage that the composition of the board of directors and key management of the enlarged UEM Sunrise will be determined by an integration committee to be formed, which will comprise representatives from UEM Sunrise and EcoWorld. The integration committee will be co-chaired by the respective chairmen of UEM Sunrise and EcoWorld,” it said.
Meanwhile, shares of EcoWorld and UEM Sunrise, which has been halted from 9am will resume trading at 10am.
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