KUALA LUMPUR, 8 March — Iskandar Waterfront Holdings Sdn Bhd (IWH) has proposed a one-for-one merger offer to take up the remaining 61.7 per cent equity in Iskandar Waterfront City Bhd (IWC).
In a statement, IWH said it would assume the listing status of IWC on the Main Board of Bursa Malaysia Securities Bhd.
This will see the establishment of one of the largest listed strategic master property developers on Bursa Malaysia.
This is subject to approval from the authorities and shareholders, upon completion of the proposed merger.
The offer price for the proposed merger is at RM1.50 per IWC share.
This represents a premium of 14 per cent over the 30-day volume weighted average price of IWC shares up to and including March 3, 2017.
The offer price will be satisfied via the issuance of IWH’s shares on the basis of one new IWH share for every one existing IWC share, which will be implemented via a scheme of arrangement.
The Board of IWC has been offered thirty market days (by April 19, 2017) to deliberate on the proposed merger offer by IWH.
In tandem with the proposed merger, IWH will embark on a proposed restructuring exercise with Tan Sri Lim Kang Hoo, Director cum Executive Vice-Chairman of IWH.
This is via internal rationalisation of minority stakes within the IWH Group and various Johor state entities, including Kumpulan Prasarana Rakyat Johor Sdn Bhd, the investment arm of the Johor Government to consolidate land bank under IWH.
This will see an injection of 3,593 acres (1,454 hectares) of land with an open market value (OMV) of RM4.1 billion into IWH.
All assets injected will be at a discount of two per cent over the OMV, as assessed by the appointed independent valuers, CBRE|WTW, Cheston International (Johor) Sdn Bhd, and Raine & Horne International Zaki + Partners Sdn Bhd.
All the asset injections will be satisfied via issuance of new IWH shares at an issue price of RM1.50 per share and IWH redeemable convertible preference shares (RCPS).
These are convertible by surrendering two RCPS for one share, i.e. at RM3.00 per conversion price, upon IWH generating a cumulative profit after tax of more than RM1 billion post the proposed restructuring exercise.
Following this corporate exercise, IWH will have a total land bank of over 7,400 acres (2,994.7 hectares) across Kuala Lumpur and Johor Bahru.
The estimated OMV of this land bank is approximately RM30 billion, as assessed by the appointed independent valuers.
In addition, upon conclusion of the merger and the proposed restructuring exercise, the expanded share capital of IWH is expected to be more than 4.3 billion.
IWH has a thriving portfolio of developments in Kuala Lumpur and Johor, and as the master developer of Bandar Malaysia, prospects are indeed bright for the Group.
IWH said it aimed to establish Bandar Malaysia as a world-class sustainable development, which would subsequently catalyse the transformation of Kuala Lumpur as one of the world’s top liveable cities.
The jewels in the crown of IWH’s development in Johor Bahru are Danga Bay and Tebrau Bay; strategically located in the waterfront destination straddling the Straits of Johor and overlooking Singapore.
IWH is currently transforming the urban landscape of Johor Bahru into a world-class development that will contribute towards establishing a liveable and sustainable city.
As a public-private partnership, all efforts are coordinated and focused on realising this objective.
“The proposed listing of the IWH Group will allow investors to participate in one of the largest property companies in Malaysia with immense potential in the region,” it said.
This provides the opportunity to invest in the strategic land bank located in the prime areas of Iskandar Malaysia waterfront and Bandar Malaysia.
The proposed scheme of arrangement and assumption of IWC’s listing status are inter-conditional, while the proposed restructuring exercise is conditional upon the proposed merger.
The proposals will be subject to, among others, the approval of the Securities Commission, Bursa Securities and the shareholders of IWC.
Astramina Advisory Sdn Bhd is the appointed Financial Advisor for IWH and appointed Transaction Arranger for IWC.
AmInvestment Bank Berhad, CIMB Investment Bank Bhd, Maybank Investment Bank Bhd and RHB Investment Bank Bhd are the appointed Joint Principal Advisors for IWC.