Tambun Indah shareholders approve acquisitions

KUALA LUMPUR: Shareholders of Tambun Indah Land Bhd approved the proposed acquisitions of minority interests in Tambun Indah Development Sdn Bhd (TIDSB) and Palmington Sdn Bhd (PSB) for RM88.2 million at the EGM held yesterday in Penang.  

The acquisition of the remaining 40% in PSB and 30% in TIDSB, which it did not own from Pembangunan Bandar Mutiara Sdn Bhd, a wholly owned subsidiary of Nadayu Properties Bhd, will allow Tambun Indah to consolidate its future earnings from the Pearl City development.

“Pearl City has a balance gross development value (GDV) of RM1.9 billion, which is expected to contribute an estimated profit before tax of more than RM600 million to the group over the next six to seven years. This exercise will generate greater value for our shareholders from a medium- to long-term perspective”, said Teh Kiak Seng, managing director of Tambun Indah.

Pearl City is Tambun Indah’s flagship mixed development, located in the southern district of Seberang Perai.   

Started in 2009, the project is undertaken by PSB and TIDSB, and is expected to be completed by 2020.

The purchase consideration of RM88.2 million will be satisfied partly via the issuance of 55 million new ordinary shares at RM1.30 each, and RM16.7 million cash.

Upon the completion of the exercise in the fourth quarter of this year, Nadayu will become a 14.2% substantial holder of Tambun Indah, the second largest after Teh’s total direct and deemed shareholding of 38.6%.

The acquisitions are now pending approval from the shareholders of Nadayu, which will be sought at its EGM on Nov 18.

This article first appeared in The Edge Financial Daily, on November 1, 2013.