Synergistic benefits

KUALA LUMPUR: Ekovest Bhd has proposed to dispose of its entire stake in wholly-owned construction arm, Ekovest Construction Sdn Bhd (ECSB), to Knusford Bhd for RM450mil.

In a recent filing with Bursa Malaysia, the group said it has entered into a binding heads of merger agreement with its major shareholder and group chief executive chairman Tan Sri Lim Kang Hoo and Knusford, which Lim is also a major shareholder.According to Ekovest, Knusford will fund the ECSB acquisition through the issuance of new ordinary shares in Knusford at the proposed issue price of 60 sen per new Knusford share.

Ekovest said the rationale for the proposed ECSB-Knusford merger was to consolidate the construction and construction-related businesses currently owned and controlled by Lim through Ekovest and Knusford.

Ekovest, through ECSB, has been subcontracting its construction works to the Knusford Group, as well as purchasing machinery, equipment and building materials, and renting machinery and equipment from the Knusford Group.

“The proposed Knusford-ECSB merger is also aimed at eliminating many of the existing recurrent related party transactions between the two groups moving forward,” it added.

The combination of both construction divisions of Ekovest and Knusford under one roof, will also result in synergistic benefits such as consolidation of resources, workforce and technical expertise of both groups and further strengthen the order book, financial position and prospects of the combined construction group, it said.

In another separate filing, Ekovest said it had entered into binding term sheets for Mohamad Nor Hamid and Lee Hun Yeung, who are shareholders of Danga City Mall Sdn Bhd (DCMSB) for the proposed acquisition of DCMSB, which owns a six-storey mall called Danga City Mall and expo centre that occupies 6.18 acres of freehold land in Johor Baru for RM210mil.

It had also entered into binding term sheets for Cheong Meow Yen and Desa Sinarmas Sdn Bhd, the shareholders of Khazanah Melati Sdn Bhd (KMSB) to acquire KMSB’s 9.64 acres of leasehold land in Johor Baru for RM100mil.

According to Ekovest, the acquisitions are subject to valuation by an independent valuer which will be satisfied by the issuance of new ordinary shares in the company at 60 sen per share.

The proposed acquisitions of the parcels of land of 15.82 acres are located along the Johor Baru–Singapore Rapid Transit System (RTS) alignment and are intended for potential transit-oriental development (TOD).“This is aimed to strengthen the existing property development and investment businesses of the Ekovest group,” it added.

The land will potentially be developed for TOD along the RTS alignment.

“As such, the proposed acquisition is expected to augur well for the Ekovest group’s property development and investment businesses moving forward,” it noted.

In a separate filing with Bursa Malaysia, Ekovest said it had entered into an agreement with Lim to explore and negotiate the purchase of a 70% stake in Credence Resources Sdn Bhd (CRSB) for a purchase consideration of RM1.15bil.

CRSB holds 63.13% equity interest in Iskandar Waterfront Holdings (IWH), which in turn holds 34.29% equity interest in Iskandar Waterfront City (IWCity).

The vendors of CRSB are to be paid via the issuance of new ordinary shares in Ekovest at the proposed issue price of 60 sen per new Ekovest shares.

CRSB’s shareholders are Kang Hoo (90%), Ekovest managing director Tan Sri Lim Keng Cheng (5%), and executive director Datuk Lim Hoe (5%).

“The proposed (CRSB) acquisition provides an opportunity for Ekovest to expand its property development segment vide access to the land bank of (CRSB) and its group of companies (Credence group and including those held through IWH and IWCity) of about 4,212 acres in Johor.

The expansion of the Ekovest group’s land bank in Johor will enable it to tap into the potential opportunities from the various government incentives to develop Johor into another financial centre of the country,” it added.

it added.

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

Next In Business News

Wall Street hunts for more AI gold post-Nvidia rally
Hektar-REIT focuses on strengthening portfolio
Timber furniture sales cool as demand softens in US, Europe
CTOS eyes new overseas markets to drive growth
HAS inks deal for five new Airbus helicopters
LBC rates for residential, commercial, industrial, hotel uses raised
MoU to improve Singapore, M’sia business ties
The maverick value investor
Big wins for billionaire Ambani in Disney tie-up
Fading population dividend

Others Also Read