IJM Land: Larger scale share participation

KUALA LUMPUR: Shareholders of IJM Land Bhd will be able to participate in the property firm on a larger scale after the proposed privatisation by its parent company, IJM Corp Bhd, said IJM Land managing director and chief executive officer (CEO) Datuk Soam Heng Choon.

“It’s not going to be taken private like some other privatisation [offers]. Here, it’s an exchange of shares. [So] the shareholders get to own shares at the corporation level, in a bigger company,” Soam said after the company’s two-hour long annual general meeting yesterday.

Soam said the proposed privatisation was because of the low liquidity of the counter, given that IJM Corp already owns 64% equity interest in IJM Land. He also noted that an extraordinary general meeting (EGM) will be convened by the end of this year on the privatisation exercise before its targeted completion date in the first quarter of next year.

In June, IJM Land proposed to offer its shareholders RM3.55 apiece in a privatisation exercise that would cost its parent company, IJM Corp, RM1.98 billion, to acquire the shares it does not own in IJM Land.

IJM Land chief operating officer and chief financial officer Edward Chong Sin Kiat said IJM Land needs to get more than 50% of its shareholders, representing not less than 75% in nominal value of the shares, to be present and vote at the EGM to be held on the privatisation.

Chong said the group is still in the early stages of the exercise and it is going through the valuation stage, as is required by Bursa Malaysia.

Both the Employees Provident Fund and GIC Pte Ltd have ceased to be substantial shareholders in IJM Land following the announcement of the proposed privatisation in June, said Chong. GIC still has a 3% stake in IJM Land.

On its outlook, IJM Land expects to sustain its revenue at around RM2 billion for its financial year ending March 31, 2015 (FY15), despite the slowdown of the property market, said Soam.

“The market is actually not that good currently,” he said, adding that many buyers are unable to get the margin of financing they need.

The group still has undeveloped tracts of 4,800 acres (1,942ha) with gross development value (GDV) of RM30 billion, which would last IJM Land for more than 10 years, said Soam.

The group is rolling out projects with a GDV of RM3 billion in FY15. To date, it has launched about RM700 million worth. It has total unbilled sales of RM2 billion, which could sustain its earnings for the next one and a half years.

Soam: An EGM will be convened by year-end on the privatisation exercise before its targeted completion date in the first quarter of next year.

This article first appeared in The Edge Financial Daily, on August 26, 2014.