Eco World International's split with EcoWorld deemed ‘fair and reasonable’ by MIDF

• To date, EWI has only operated in the UK and Australia. As at Feb 28, 2025, the group had completed the development of 10 projects in the UK and two projects in Australia, with cumulative sales achieved of RM19 billion.

KUALA LUMPUR (May 30): Minority shareholders of Eco World International Bhd or EWI (KL:EWINT) have been advised to support the property developer’s proposals, including ending its collaboration with Eco World Development Group Bhd (KL:ECOWLD), to pave the way for entry into the Malaysian real estate market.

Currently, a collaboration agreement signed in 2016 by both companies restricts EWI from venturing into Malaysia, while EcoWorld is restricted from undertaking any property development or investments in countries other than Malaysia. EWI is 29% owned by EcoWorld.

In its independent advice circular to EWI shareholders on Bursa Malaysia on Friday, MIDF Amanah Investment Bank Bhd recommended that shareholders vote in favour of the resolutions pertaining to the proposals, which will be tabled at EWI’s forthcoming extraordinary general meeting, as it finds them “fair and reasonable”.

According to the independent adviser, the proposed collaboration agreement termination will enable EWI to pivot strategically into a market with more favourable operating conditions.

"While EWI has built a presence in the UK and Australia, prevailing market conditions in these countries, including elevated interest rates, construction cost pressures, policy uncertainties, and cooling foreign investment sentiment, have created a more challenging landscape for new project launches in the near term. These challenges, when coupled with uncertain demand, longer project gestation, and completion method revenue recognition framework, constrain near-term cash flow and earnings visibility.

"In contrast, the Malaysian market offers better near-term growth stability for EWI," MIDF noted.

While EWI will no longer be able to use the “EcoWorld” brand name, MIDF pointed out that the group is already well recognised in its existing overseas markets based on its proven track record in project delivery and execution.

"Nonetheless, we acknowledge that in entering the Malaysian market, EWI will need to gradually establish its identity under a new name, which the group is expected to achieve over time," it added.

In addressing any potential conflict of interest, MIDF noted that on April 30, EcoWorld director and executive chairman Tan Sri Liew Kee Sin had resigned from his role as a director and executive vice-chairman of EWI, while EcoWorld chief financial officer Datuk Heah Kok Boon had also resigned as a director of EWI, thereby eliminating dual board representation and potential governance ambiguity.

As part of the proposals, EWI plans to rename itself as EWI Capital Bhd.

To date, EWI has only operated in the UK and Australia. As at Feb 28, 2025, the group had completed the development of 10 projects in the UK and two projects in Australia, with cumulative sales achieved of RM19 billion.

At noon break on Friday, EWI shares closed down half a sen or 1.59% at 31 sen, giving it a market capitalisation of RM744 million. The stock has risen 14.8% so far this year. Shares of EcoWorld, meanwhile, were down four sen or 2.07% to settle at RM1.89, valuing the group at RM5.62 billion. The counter is down 11.7% so far this year.

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