KUALA LUMPUR (Aug 26): Ekovest Bhd, which is controlled by tycoon Tan Sri Lim Kang Hoo, is proposing to provide financial assistance amounting to S$77.28 million (RM240.34 million) to its indirect 29%-owned joint venture (JV) company MCC Land (TMK) Pte Ltd in the form of deed of undertaking for banking facilities obtained by the latter from licensed financial institutions based in Singapore.
The amount is more than 5% of Ekovest's net tangible asset for the financial year ended June 30, 2020. Thus, the company is required to issue a circular to its shareholders and seek its shareholders' approval at the forthcoming extraordinary general meeting.
In a bourse filing yesterday, Ekovest said the proposed provision of financial assistance is to facilitate MCC Land (TMK) to obtain the required funding for its TMK Development project in Singapore.
"The availability of expedient funding would help avoid unnecessary delays for MCC Land (TMK) to complete the land acquisition, and also to ensure that TMK Development can commence work immediately," it added.
Singapore-based MCC Land (TMK) is a 29%-owned JV company of Ekovest Development (S) Pte Ltd (EDSPL), which in turn is a wholly-owned subsidiary of Ekovest. On Dec 30 last year, EDSPL had entered into a JV with MCC Land (Singapore) Pte Ltd and Sky Vision Management Pte Ltd to jointly develop a 8,880 sq m piece of land in Tanah Merah Kechil, Singapore into a mixed-use development comprising residential flats with carpark, communal facilities and a commercial component. MCC Land (Singapore) holds a 51% stake in the JV, while Sky Vision has a 20% stake.
Ekovest said the deed of undertaking is provided as security for MCC Land (TMK), its associate company, to secure banking facilities totalling S$266.48 million for MCC Land (TMK) to complete the land parcel acquisition and to carry out the TMK Development.
Thus, the proposed provision of financial assistance of S$77.28 million is in proportion to Ekovest's shareholding in MCC Land (TMK). The other two ultimate shareholders in MCC Land (TMK) will be providing a deed of undertaking in proportion to their equity interest in the JV company as well.
The TMK Development, which has a gross development value of S$487 million, is Ekovest Group's maiden property development overseas.
Barring any unforeseen circumstances, Ekovest expects the deed of undertaking to subsist throughout the tenure of the banking facilities or until the full repayment of the banking facilities.
Ekovest shares closed unchanged at 40 sen yesterday, bringing a market capitalisation of RM1.06 billion.
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