Kuala Lumpur, March 9 – Iskandar Waterfront Holdings Sdn Bhd (IWH) yesterday announced a proposed one for one merger offer to take up the remaining 61.7% equity in Iskandar Waterfront City Berhad (IWC).
Subject to approval from the authorities and shareholders, upon completion of the proposed merger, IWH will assume the listing status of IWC on the Main Board of Bursa Malaysia Securities Bhd, which will see the establishment of one of the largest listed strategic master property developers on Bursa Malaysia.
The offer price for the proposed merger is at RM1.50 per IWC share. This represents a premium of 14% over the 30-day volume weighted average price of IWC shares up to and including 3 March 2017. This 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. Subsequent to this, IWH will assume the listing of IWC.
The Board of IWC have been offered thirty market days (by 19 April 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, via internal rationalisation of minority stakes within the IWH Group and various Johor state entities, including Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ), the investment arm of the Johor State Government to consolidate land bank under IWH.
This will see an injection of 3,593 acres of land with an open market value (OMV) of RM4.1 billion into IWH. All assets injected will be at a discount of 2% 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) which are convertible by surrendering 2 RCPS for 1 share, i.e. at RM3.00 per conversion price upon IWH generating a cumulative PAT 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 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 aims to establish Bandar Malaysia as a world-class sustainable development, which will subsequently catalyse the transformation of Kuala Lumpur as one of the world’s top liveable cities.