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KUALA LUMPUR (September 16): The price of a 40% stake in IWH-CREC Sdn Bhd, which Ekovest Bhd is currently in talks to acquire, is estimated at 1.5 billion ringgit, according to Tan Sri Lim Kang Hoo, the shareholder common of the two entities.
IWH-CREC is a joint venture (JV) that owns a 60% majority stake in the Bandar Malaysia development project near Sungai Besi in the capital city. The Ministry of Finance has the remaining 40%.
In summary, Ekovest announced last Tuesday that it was going to begin exclusive negotiations to buy a 40% equity stake in IWH-CREC from Iskandar Waterfront Holdings Sdn Bhd (IWH).
IWH-CREC is a 60:40 JV between IWH and China Railway Engineering Corp (M) Sdn Bhd (CREC) currently.
Lim is the majority shareholder of IWH and Ekovest. It has a 63% stake in IWH and a 32.4% stake in Ekovest.
If the negotiations are successful, IWH-CREC will have three shareholders, namely Ekovest (40%), IWH (20%) and CREC (40%).
Lim said that the acquisition will benefit Ekovest in a long-term perspective, as this will allow the construction team to have a direct stake in future developments at Bandar Malaysia.
“I am president of both companies, so I have to be fair to both companies. For Ekovest to participate, it will have a direct link to jointly develop any infrastructure or development in Bandar Malaysia. This will be very good for Ekovest’s future order book.
“With the estimated gross development value of RM 140 billion for Bandar Malaysia, Ekovest should have a stake with IWH along with CREC,” Lim told The Edge in an interview.
On financing the purchase, Lim said the group will explore various financing options that are suitable for the company, including internal financing, bank loans and cash purchase options.
This proposal is subject to the approvals, waivers or consent of all relevant parties, including but not limited to Ekovest shareholders.
When asked if he is confident that Ekovest shareholders will give the green light to the proposed stake purchase, Lim said: “I have no say in the shareholders’ decision. But, for such a good stake for Ekovest in the next 20 to 30 in the next few years, I don’t see shareholders opposing this proposal. But they have their rights. “
Bandar Malaysia will start in 2021
Meanwhile, Lim said that the Bandar Malaysia project, which consists of rebuilding the old air force base at Sungai Besi, is ready to start early next year after the settlement of the RM1.24 billion payment owed to the government. federal by IWH-CREC.
The project has been delayed due to the Covid-19 pandemic, Lim said. It was initially planned to start in March of this year.
In December last year, IWH-CREC signed a re-expressed and amended share sale agreement with TRX City Sdn Bhd to purchase a 60% stake in the capital stock of Bandar Malaysia Sdn Bhd, the lead developer of Bandar Malaysia, for RM7 .41 billion.
IWH-CREC must pay an advance deposit of RM1.24 billion for the 60% stake in Bandar Malaysia. The amount comprises a deposit of RM 741 million plus an additional RM 500 million, due on September 15.
IWH-CREC yesterday resolved the advance payment of the 60% stake in Bandar Malaysia. He presented a check to Finance Minister Tengku Datuk Seri Zafrul Aziz at a ceremony.
This marked the official fulfillment of IWH-CREC’s initial contractual obligations to the government to launch the work in Bandar Malaysia.
Lim said IWH-CREC’s ability to meet its commitment to the federal government despite the Covid-19 pandemic is proof of the joint venture’s confidence in the Bandar Malaysia project.
“This is also significant because it shows that foreign investors are still optimistic and confident in Malaysia and its economy,” he said, adding that Bandar Malaysia will serve as a new smart city to attract global high-impact business, technology and financial firms.
Chen ZhiGong, Chairman of CREC Malaysia, said that Bandar Malaysia is a testament to the long-term and strong bilateral relations and economic benefits shared by the people of Malaysia and China.
“I am confident that Bandar Malaysia will have a major impact on the Malaysian economy as it will serve as a hub to further attract high-impact global multinationals,” Chen said, noting that China-based companies have shown interest. in establishing its regional headquarters in this new smart city.
IWH-CREC said that the company will soon invite qualified local and foreign investors, developers, consultants and contractors to submit their proposals to participate in this development.
He added that there will be great opportunities for the participation of Malaysian and bumiputera companies, while prioritizing the use of Malaysian construction materials, technologies and local talent.
The RM 140 billion integrated development will feature integrated components covering finance, technology, medical science, education, tourism and entrepreneurship, as well as being a smart city.
While there is growing concern about an oversupply of office space, stakeholders in the massive Bandar Malaysia development believe the project could be the solution to the glut as more foreign companies are establishing regional headquarters in Kuala Lumpur.
Read also:
Zafrul: RM140b Bandar Malaysia will be the largest development in the country
Malaysia’s Iskandar Waterfront Targets $ 1.2 Billion IPO in First Half 2021
Putrajaya to emphasize investor-friendly policies in budget 2021, Malaysia’s twelfth plan
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