KUALA LUMPUR (Oct 23): UEM Sunrise Bhd has announced a reduction in its stake in a firm developing 2,500 acres (1,011.71ha) of land in Kulai, Johor, which will result in Kuala Lumpur Kepong Bhd (KLK) taking over as the firm’s majority shareholder.
UEM Sunrise said its wholly-owned unit UEM Land Bhd is disposing of 20% of its 60% stake in Aura Muhibah Sdn Bhd to KLK’s property development arm KLK Land Sdn Bhd for RM182.6 million.
Following this, KLK Land’s shareholding in Aura Muhibah will rise to 60% from 40% at present, UEM Sunrise said in a bourse filing today.
The group and KLK signed the partnership agreement to develop land in Johor in 2014.
UEM Sunrise said a new shareholders' agreement will be signed to replace the deal entered into in 2014.
The group said the decision to reduce its stake in Aura Muhibah is aimed at progressively reducing its investment and exposure to Johor as part of its portfolio rebalancing strategy.
This follows the partial disposal of its holding in another property in Desaru in August 2019.
The stake reduction will also allow the group to focus its Johor resources on Iskandar Puteri, where the group still owns a land bank of more than 5,000 acres, said UEM Sunrise.
It added that the RM182.6 million proceeds, which are expected to be paid in the first half of 2021, would allow the group to pursue its geographical diversification strategy in other market demand-driven localities, such as the Klang Valley.
UEM Sunrise’s share price was unchanged at 38 sen in afternoon trading today, valuing the group at RM1.72 billion.
KLK, meanwhile, was down two sen or 0.09% to RM21.38, giving it a market capitalisation of RM23.11 billion.
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