KUALA LUMPUR (Oct 16): Ideal United Bintang International Bhd’s (IUBI) substantial shareholders Tan Sri Ooi Kee Liang and his spouse Puan Sri Phor Li Wei plan to inject their three private property companies into the group to bolster its current portfolio of development projects and enhance its profile as a property developer by participating in more profitable projects.
In a filing with Bursa Malaysia yesterday, IUBI said it had entered into a conditional sale and purchase agreement with Ooi and Phor for the proposed acquisition of Modular Platinum Sdn Bhd, Ideal Homes Properties Sdn Bhd and Premium Flame Development Sdn Bhd for RM353.09 million.
The proposed acquisition is deemed a related party transaction, as Ooi, IUBI’s executive chairman, and Phor, IUBI’s executive director, hold a combined 54.07% equity interest in IUBI through their shareholdings in ICT Innotech Sdn Bhd. They are also directors of the target companies and collectively hold the entire equity interest in them.
IUBI said the purchase consideration of RM353.09 million represents a 34.7% discount to the indicative market value of the three companies of RM540.4 million, as appraised by Messrs Henry Butcher Malaysia (Penang) Sdn Bhd.
It also plans to undertake a proposed private placement of up to 393.08 million new shares or 30% of IUBI to raise RM200.5 million, of which the proceeds will be used for development costs of the three property projects.
IUBI is proposing a one into two share split to improve the liquidity of its shares as well. Assuming the placement shares are issued at an indicative issue price of RM1.02 per placement share, or 51 sen after adjusting for the effects of the proposed share split, the indicative issue price is based on an 8.28% discount to the five-day volume weighted average price of IUBI shares of RM1.1121 as at last Friday.
“The proposed private placement is conditional upon the proposed acquisition, and is expected to be implemented simultaneously with the proposed acquisition. In this respect, the company expects to identify the public investors to subscribe for the placement shares prior to the issuance of the consideration shares,” said IUBI.
Modular is currently jointly developing a 18,635-sq m tract in Barat Daya, Penang, with Koperasi Tunas Muda Sungai Ara Bhd. Known as Imperial Grande, the development comprises two blocks of apartments with 938 units, 65 units of shoplots or offices, and has a gross development value (GDV) of RM499.8 million. As at Aug 31, the project was at 10% completion with the balance to be completed in three years.
Ideal Homes is also undertaking a joint development with Koperasi Tunas Muda on a 51,470-sq m parcel in Barat Daya, with a GDV of RM665.4 million. The project is at 10% completion with the balance to be completed in four and a half years.
Premium Flame is developing two plots in Barat Daya. The Imperial Ville project’s total estimated GDV is RM246.5 million. As at Aug 31, it was at 18% completion. The balance of the development is estimated to be completed in three and a half years.
“Barring unforeseen circumstances, the proposals are expected to be completed by the first quarter of 2019,” said IUBI.
This article first appeared in The Edge Financial Daily, on Oct 16, 2018.