Sunway plans to buy EPF’s 20% stake in Sunway South Quay

KUALA LUMPUR (Oct 25): Sunway Bhd plans to buy the remaining 20% stake held by the Employees Provident Fund (EPF) in Sunway South Quay Sdn Bhd (SSQ) for RM136.64 million in cash plus payment of RM73.35 million for the settlement of the Musyarakah Capital invested by EPF in SSQ.

In a filing with Bursa Malaysia, Sunway said its subsidiary Sunway Lagoon Sdn Bhd (SLSB) had signed a share sale agreement (SSA) with EPF yesterday for the stake purchase that would enable the group to have full ownership of the mixed development project and its land bank.

The stake purchase came shortly after SLSB signed an SSA with Kuwait Finance House (M) Sdn Bhd on Oct 10 to buy 50,000 SSQ shares held by the financial group.

After the two acquisitions, SSQ, currently 60%-owned, would become wholly-owned by SLSB, it said.

The proposed acquisitions would also contribute to the group’s profitability as SSQ is already a profitable ongoing concern.

“The increase in the stake is an affirmation of Sunway’s confidence and commitment to the long-term prospects and success of Sunway South Quay,” Sunway added.

SLSB is wholly owned by Sunway City Sdn Bhd, which in turn is wholly-owned by Sunway, while SSQ, 60% owned by SLSB, would become 100% owned once the acquisitions are completed.

The purchase consideration will be funded through bank borrowings and internally generated funds.

Barring unforeseen circumstances, Sunway expects the proposed acquisitions to be completed on Dec 15, 2017 or such other date as may be agreed upon between EPF and SLSB.

Sunway shares closed up one sen or 0.59% at RM1.69, with a market capitalisation of RM8.29 billion.

This article first appeared in The Edge Financial Daily, on Oct 25, 2017.

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