Eco World International may debut on Bursa as early as December

ECO World International Bhd’s (EWI) initial public offering is expected to take place as early as December. It is still on track, although behind the original schedule, say sources.

“The listing is still happening and the company could be listed as early as December this year or the beginning of next year,” says a source familiar with the listing exercise.

He reveals that the shareholding structure of the property firm founded by Tan Sri Liew Kee Sin has been finalised.

Banking tycoon Tan Sri Quek Leng Chan will subscribe for a 27% stake while Liew will likely take a personal stake of 10%.

With that equity interest in hand, Liew will be in control of EWI as his flagship Eco World Development Group Bhd will also take up a 30% stake in EWI.

Property analysts say a potential cause of the delay could be due to foreign exchange fluctuations. “The pound sterling has weakened to £1 to RM5.16 today, from £1 to RM6.50 before,” an analyst says, adding that the foreign exchange movements could affect the valuation of the IPO.

“Yes, it was publicly announced that the IPO was delayed to September or October … and that timeline itself seems to have shifted.”

EWI’s IPO is expected to be in the range of RM2 billion to RM2.5 billion, according to sources. About 42.7% will be earmarked for institutional and selected investors, 20% to 30% for EcoWorld, 10% for entitled shareholders of EcoWorld, 5% for directors and employees of EWI and EcoWorld, and 2% for the Malaysian public.

In June, EWI president and CEO Datuk Teow Leong Seng told the media that there was a slight delay in the IPO as the group needed to obtain approval from the Securities Commission Malaysia (SC) to enlist a co-anchor for the listing.

“Because of the entry of a big property group as a co-anchor, we have submitted all the documents to the SC and we are waiting its clearance,” Teow told the press conference then.

When asked who the strategic partner was, Liew, who was present at the press conference, said the partner was “an international player from Malaysia and a Singaporean entity”, and that the group could not reveal the identity before obtaining the SC’s approval.

The Edge wrote in May that Quek was eyeing a substantial stake in the group and his team was undertaking a due diligence study on EWI at that time.

The latest development in EWI seems as though Quek has decided to place his bets on the company’s property play in the UK. It will be interesting to see how much the substantial stake in EWI will cost him. He is well known for his ability to sniff out a good deal and hardly overpays for assets.

A source familiar with the Hong Leong Group said in May that “he (Quek) is keen on the London property market and wants to buy into that segment through EWI’s platform … But, of course, it also depends on pricing”.

The source confirms that the group is still keen on the London market despite Britain’s decision to leave the European Union.

“Brexit doesn’t change things. The group wouldn’t pull out of the UK just because of it. It does have quite a large exposure to the UK already and is comfortable with that,” the source commented at end-June.

Hong Leong Group’s GL Holdings Ltd is the largest hotel owner and operator in London with over 5,000 rooms, operating 17 hotels across six brands — Clermont Hotels & Residences, Amba Hotels, every hotels, Guoman Hotels, Thistle and Thistle Express. Hong Leong Group is majority owned by Quek.

Singapore-listed GL Holdings also owns The Clermont Club, a private gaming club with an exclusive members-only casino in Mayfair, London, as well as a substantial stake in London-listed gaming company Rank Group Plc.

Quek set tongues wagging recently when he stepped down as chairman and board member of Guoco Group Ltd earlier last month and resigned as chairman and director at Singapore-listed GL Ltd. His resignation continues to raise speculation, but sources say the tycoon is almost certain to emerge in EWI.

EWI received the SC’s approval in April to list on the Main Market of Bursa Malaysia. The proposed IPO will involve the issuance of up to 2.153 billion new shares in EWI representing up to 89.7% of its enlarged issued and paid-up share capital. The property company said on April 7 that there would also be a bonus issue of up to 960 million free warrants in EWI on the basis of two warrants for every five shares held after the IPO.

The proceeds from the proposed IPO is earmarked primarily to provide ongoing working capital for the group’s projects in the UK and Australia. The funds will be used to repay borrowings undertaken to part-finance, among others, land and related acquisition costs and project development expenditures.

This article first appeared in The Edge Malaysia on Oct 10, 2016. Subscribe here for your personal copy.