Ekovest to take control of IWC, IWH merger plan scrapped

In a 1-for-1 all share deal, Ekovest will issue new shares priced for a 62% stake in IWC


Tan Sri Lim Kang Hoo (picture)  has proposed to Ekovest Bhd to take a 62% stake in Iskandar Waterfront City Bhd (IWC) in a share exchange deal and thus scrapping the initial plan for Iskandar Waterfront Holdings Sdn Bhd (IWH) to take over IWC.

In a one-for-one all share deal, Ekovest will issue new shares priced for a 62% stake in IWC at RM1.50 per share.

Lim and partner, Kumpulan Prasarana Rakyat Johor (KPRJ), will retain a 38% stake in IWC while minorities interest will become shareholders of Ekovest under the new deal, Ekovest’s filing to the exchange yesterday noted. Lim is the controlling shareholder in all three companies, holding 63% of IWH and about 47.5% in Ekovest together with persons acting in concert. IWH in turn holds 38% of IWC with the remaining stakes held by minorities and KPRJ.

The deal done at RM1.50 a share values IWC at RM1.25 billion. If this corporate exercise is completed, Lim will hold a 38% stake in the enlarged Ekovest, a property construction and toll concession concern.

The filing noted Lim will also propose to IWH to reject the offer made by Ekovest under the proposed acquisition.

“Following this, the implementation of the proposed merger and restructuring exercises are no longer consistent with the anticipated benefits and intentions, which were originally envisaged by IWH,” IWC noted in its filing yesterday.

“The parties are unlikely to be in a position to fulfil the condition precedent contemplated in the merger agreement within the originally anticipated timeframe for fulfilment or obtainment.”

The enlarged Ekovest would have direct participation in IWC and access to landbank measuring some 1,052 acres (425.73ha), resulting in the establishment of one the largest listed property developers on the local bourse.

As of last year, Ekovest retained 22 acres of landbank located in Setapak and Gombak in Selangor. The company has since been awarded a further 30 acres of land within the Kuala Lumpur (KL) River City project by the government in July.

The restructuring is expected to afford greater synergy between IWC’s assets in Johor and Ekovest’s new landbank in KL, and is the second attempt to complete the internal reorganisation of Lim’s growing corporate interests, after the IWC-IWH merger was derailed when TRX City Sdn Bhd terminated the sale of a 60% stake in Bandar Malaysia Sdn Bhd to IWH and its venture partner.

The award was initially intended to be given to a consortium, comprising IWH and China Railway Engineering Corp (M) Sdn Bhd, which would then be used as the stepping stone whereby the IWC-IWH restructuring would be completed.

Both Ekovest’s and IWC’s shares resume trading today.