IJM reviewing key businesses, assets after rebuffing Sunway’s offer

KUALA LUMPUR (March 16): IJM Corporation Bhd (KL:IJM) said it is reviewing the strategy for its key businesses, including monetising part of its vast land bank at its property division, after rebuffing a takeover offer.

The intention is to gradually shrink its land bank that now spans around 3,000 acres while shifting towards smaller, faster-turnaround projects, including transit-oriented projects such as the development at the Cochrane MRT Station, said group chief executive officer Datuk Lee Chun Fai. (pictured)

IJM is also developing a pipeline of investment properties from its portfolio now worth about RM5 billion which could generate recurring rental income upon opening over the next few years, he said.

Lee was speaking at a news briefing about the findings by an independent adviser appointed to advise shareholders on the takeover offer by Sunway Bhd (KL:SUNWAY). M&A Securities concluded that the offer by Sunway should be rejected for being “not fair and not reasonable”.

In January, Sunway launched an offer to acquire IJM in a cash-and-share deal that values the property-and-infrastructure company at RM3.15 per share or RM11 billion. 

Lee highlighted that IJM still has opportunities to unlock shareholder value over the near to mid term. Among the key initiatives under consideration are the rationalisation of IJM’s India portfolio, potential listing of the construction business, and sale or listing of the toll road assets

Longer-term initiatives

IJM is also evaluating ways to unlock value from its toll road portfolio, including monetising mature concessions or listing the assets through an infrastructure vehicle once restructuring is complete. “Once we finish restructuring, we would like to monetise the highways,” Lee said.

Key projects are progressing, with the RM1.4 billion New Pantai Expressway extension underway and scheduled for completion in 2029, while the West Coast Expressway is slated for completion by late 2026 following the conclusion of land acquisitions.

Lee also highlighted long-term growth potential in its port operations at Kuantan Port, despite a temporary decline in throughput due to maintenance works by a key customer.

The port is expected to benefit from improved logistics connectivity across Peninsular Malaysia upon completion of the East Coast Rail Link — a mammoth project costing some RM75 billion to connect Port Klang in Selangor to Kelantan’s capital city Kota Bahru.

The port may also see increased activity from potential new industrial tenants in the surrounding area, including the proposed carbon capture, utilisation and storage project by PETRONAS, as well as two refinery projects and a tyre manufacturing facility, Lee highlighted.

..........

EdgeProp's inaugural monthly print edition is fresh off the press! Free delivery is available for selected regions. Subscribe now.