Mulpha to receive RM933.7 mil from sale of interest in Australia’s Aveo Group

• Brookfield Asset Management Inc, AOG Limited Partnership (AOG LP), and Hydra RL MEP Pty Ltd are selling all their shares in Hydra RL TopCo Pty Ltd, which indirectly fully owns Aveo. Mulpha, through its unit Mulpha Investments (BVI) Ltd, indirectly owns 15.8% of TopCo via AOG LP.

KUALA LUMPUR (June 26): Mulpha International Bhd (KL:MULPHA) will get A$339.3 million (RM933.7 million) from its 15.2% stake in Australian retirement operator Aveo Group, which it had to sell under a tag-along arrangement.

The sale values Aveo, which runs retirement villages with over 10,000 units in top suburbs along Australia’s east coast, at A$3.85 billion.

Mulpha expects a 63.3% return, gaining about A$117.6 million (RM323.6 million) from the sale, according to its filing with the bourse.

Brookfield Asset Management Inc, AOG Limited Partnership (AOG LP), and Hydra RL MEP Pty Ltd are selling all their shares in Hydra RL TopCo Pty Ltd, which indirectly fully owns Aveo. Mulpha, through its unit Mulpha Investments (BVI) Ltd, indirectly owns 15.8% of TopCo via AOG LP.

Mulpha, an investor in Aveo since 2005, said it wanted to keep its stake in Aveo like it did in 2019 when Brookfield took Aveo private, but the buyer, Retirement Living Core Fund HoldCo Pty Ltd, refused.

In 2019, shareholders could choose cash or shares in AOG LP, an investment vehicle that would hold a minority interest in Aveo through TopCo. The 2019 deal said that if Brookfield’s shareholders sell their stake in TopCo, which indirectly owns all the securities of Aveo, they can force AOG LP to sell too (drag-along rights).

Mulpha said Brookfield, the main owner of TopCo, started the Aveo sale and negotiated the deal with the buyer. Mulpha’s management has been regularly talking with Brookfield to help complete the sale.

According to Bursa Malaysia, Mulpha will use 35% (RM330.2 million) of the proceeds to repay bank borrowings, while the remaining 65% (RM603.5 million) will be used for working capital.

Mulpha has about RM727.5 million in short-term debt and RM1.6 billion in long-term debt. Its cash pile stands at RM122.8 million with another RM194.7 million in other investments, totaling RM317.5 million in liquid assets.

Shares in Mulpha closed up 15 sen or 4.62% at RM3.40 on the news of the sale, valuing the group at RM1.06 billion. Year to date, the stock has gained over 36%.

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