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KUALA LUMPUR: UEM Sunrise Bhd
and Eco World Development Bhd have received a letter from UEM Group Bhd proposing a merger into an expanded group.
In a filing with Bursa Malaysia on Monday, EcoWorld said that on Oct. 2 it received a letter from the UEM Group, proposing that the board consider and deliberate on the proposed merger.
“The proposed merger is expected to be carried out through an exchange of shares and warrants held by EcoWorld Malaysia shareholders and warrants for new shares and new warrants of UEM Sunrise respectively,” it said.
“The board will meet shortly to deliberate on the proposed merger and will then make a further announcement,” EcoWorld added.
In a separate presentation, UEM Sunrise said the board will deliberate on the proposal and decide the next course of action. Accordingly, a new announcement will be made in due course.
The proposed merger is expected to bring together the strengths and capabilities of UEM Sunrise and EcoWorld, according to the UEM Group letter.
“Upon completion of the proposed merger, EcoWorld will become a wholly owned subsidiary of UEM Sunrise and will be delisted from Bursa Malaysia Securities Bhd’s main market,” said UEM Group.
The proposed merger will take place through an exchange of shares and warrants. Holders of shares and warrants in EcoWorld will exchange their shares and warrants in EcoWorld respectively for new shares and warrants of UEM Sunrise, thus becoming holders of shares and warrants in expanded UEM Sunrise.
UEM Group said that given moderate macroeconomic conditions and market headwinds, it believes there is an urgent 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 strong business platform for future development. This, in turn, will lead to greater value creation for current UEM Sunrise and EcoWorld shareholders in the future, ”he said.
“We anticipate that upon completion of the proposed merger, the expanded UEM Sunrise group will focus on real estate developments within Malaysia and planned developments on UEM Sunrise-owned land outside Malaysia. This will allow the expanded UEM Sunrise group to stay focused on real estate developments within Malaysia, said UEM Group.
As of September 25, UEM Sunrise is 66.1% owned by UEM Group, a wholly owned subsidiary of Khazanah Nasional Bhd.
“We anticipate that following the completion of the proposed merger, Khazanah, through UEM Group, will remain the largest shareholder in the expanded UEM Sunrise, followed by EcoWorld’s major shareholders on a collective basis,” he said. 
UEM Group has also proposed that the board of directors of the expanded UEM Sunrise be headed by a “president” who is a member of the board of directors of UEM Sunrise.
“We anticipate that the composition of the board of directors and key management of the expanded UEM Sunrise will be determined by an integration committee to be formed, which will be comprised of representatives from UEM Sunrise and EcoWorld. The integration committee will be co-chaired by the respective presidents of UEM Sunrise and EcoWorld ”, he said.
Meanwhile, the shares of EcoWorld and UEM Sunrise, which stopped starting at 9 a.m. M., They will resume at 10 a.m. M.
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