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Friday, October 28, 2016

Quek's GuocoLand to take up 27% stake in EcoWorld International IPO

Thursday, 27 October 2016 | MYT 1:01 PM


Eco World Bhd will hold a 27% stake in Eco World International under its IPO

KUALA LUMPUR: Tycoon Tan Sri Quek Leng Chan's GuocoLand Ltd will take up a 27% strategic stake in Eco World International Bhd (EWI) which will seek a listing on the Main Market of Bursa Malaysia Securities.

Curretly, Tan Sri Liew Kee Sin, the executive vice chairman of EWI holds 246.54 million shares in EWI representing 99.9% of the unlisted entity. Pursuant to the IPO, EWI will be issuing up to 2.153 billion new shares.

This will see EWI raising more than RM2bil under its listing exercise by selling 2.15 billion new shares in the company. The par value is RM1 per share while the retail price has yet to be fixed.

Funds raised from the IPO would be used to finance four projects in London and Sydney.

Under the floatation exercise, Eco World Development Group Bhd (EW Bhd), which is the parent of EWI, will reduce its shareholding in the latter to 27%. EW Bhd was initially the sole strategic investor to invest in EWI.

The proposed subscription for a 27% stake each by EW Berhad and GuocoLand is to ensure that post-listing, EWI will have a minimum free float of at least 25% as stipulated under Bursa Malaysia’s Listing Requirements.

“EW Bhd and GuocoLand will co-anchor the proposed IPO of EWI. EWI will benefit from the strategic and financial support of two experienced shareholders who have expertise in identifying, acquiring, developing and funding sizeable mixed-development projects in each of its markets in Asia,” it said.

Importantly, EW Bhd said the shareholders’ agreement allows both parties to safeguard their investments in EWI and to regulate the relationship between them as shareholders in EWI, including mitigating any potential conflict of interest situations between them.

The proposed IPO of EWI will entail a public issue of up to 2.153 billion new EWI shares to be offered, representing up to 89.7% of the enlarged issued and paid-up share capital of EWI.

The institutional offering will involve the offering of up to 449.459 million IPO shares at the institutional price – 18.7% of the enlarged issued and paid-up share capital of EWI – Malaysian institutional and selected investors; and foreign institutional and selected investors outside the US.

The retail offering will involve 408 million IPO shares at the retail price, representing 17.0% of the enlarged paid-up share capital of EWI, to five directors of EWI and eligible employees of EWI, its subsidiaries and joint ventures; 11 directors and eligible employees of EW Bhd and the public.

Under the proposed IPO, EWI will implement a bonus issue of up to 960 million warrants in EWI ahead of the proposed on the basis of two warrants for every five shares held.

The price of the new IPO shares will be issued largely be determined by way of a bookbuilding process. This process will be conducted by investment banks appointed in conjunction with EWI’s IPO.

EWI is a public company in Malaysia mainly involved in investment holding. Through its subsidiaries, EWI owns a 75.0% stake in three ongoing property development projects in London, UK and 100% stake in one ongoing property development project in West Sydney, Australia, with a combined total estimated gross development value (GDV) of approximately RM12.94bil.

(i) Phase 2 of the wider London City Island’s masterplan scheme on the Leamouth Peninsula located approximately 1.5 miles east of Canary Wharf, London, with an estimated GDV of pound sterling 691.3mil.

(ii) Phase 2 of the wider Embassy Gardens’ masterplan scheme in the Nine Elms regeneration area located on the south side of the River Thames, London, United Kingdom, with an estimated GDV of pound sterling 932.5mil;

(iii) Wardian London situated next to Canary Wharf, London, United Kingdom, with an estimated GDV of pound sterling 566.1mil; and

(iv) West Village on the southern fringe of Parramatta’s central business district and retail precinct in Sydney, Australia (West Village, Parramatta), with an estimated GDV of A$318.4mil.

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