KUALA LUMPUR (May 16): Iskandar Waterfront City Bhd (IWCity) shares resumed their uptrend in active trade this morning after a frenzy of buying interest in the stock in afternoon trading session pushed up its share price by 29.9%, or 49 sen, yesterday.
At 9.10am today, IWCity rose 27 sen to RM2.40 with 46.43 million shares traded.
The Edge Financial Daily this morning reported that the spike in interest was fuelled by expectations of a possible reversal of the termination of the 60% stake sale in the Bandar Malaysia project.
The stock, which was battered down last week, hit limit-up half an hour before market close at RM2.13 yesterday.
The daily said IWCity succumbed to a heavy selldown because it has proposed a merger exercise with its sister company Iskandar Waterfront Holdings Sdn Bhd (IWH). IWH’s equity interest in Bandar Malaysia was perceived to be the prized asset in the entire merger exercise, given the sizeable prime land near Sungai Besi — less than 8km from the Petronas Twin Towers and Kuala Lumpur Sentral. Both IWCity and IWH are controlled by Lim.
IWH holds a 60% stake in IWH CREC Sdn Bhd, while the balance 40% stake is held by state-owned China Railway Engineering Corp (M) Sdn Bhd (CREC). The joint venture signed a share sale agreement with TRX City on Dec 31, 2015, paying RM7.41 billion for the equity stake in Bandar Malaysia.
TRX City had said the agreement had lapsed because IWH CREC “failed to meet the payment obligations”. However, IWH CREC said the unilateral move by TRX City to call off the deal was “unacceptable” as the consortium had fulfilled its obligations and was keen to carry on as the master developer of Bandar Malaysia. — theedgemarkets.com