KUALA LUMPUR (March 8): Iskandar Waterfront City Bhd (IWC) announced a proposed merger plan with its major shareholder Iskandar Waterfront Holdings Sdn Bhd (IWH) through a share swap scheme.
The merger plan also entails proposed asset acquisitions of RM4.1 billion from four parties, including Tan Sri Lim Kang Hoo and Sultan Ibrahim of Johor, through issue of new shares and new redeemable convertible preference shares (RCPS).
The proposed asset acquisitions will enhance the merged entity’s revalued net asset value (RNAV) to RM4.50 per share or RM30 billion, with 7,367 acres of land bank excluding IWH’s equity interst in Bandar Malaysia project. IWH holds an effective 36% stake in Bandar Malaysia project.
The share swap scheme will be on the basis of one IWC share held for one IWH share. The latter will take over the listing status upon completion of the share swap, according to the filing with Bursa Malaysia this evening.
IWC's shares were last traded at RM1.64 before the stock was suspended from the trading last Friday. IWH shares will be valued at RM1.50 each, representing a 14% premium over IWC’s volume weighted average price of RM1.315.
With the latest plan, IWH, which had planned to unlock its land bank value through a new listing exercise since 2013, will not undertake an initial public offer.
This confirms the article entitled “IPO shelved, IWH to merge with IWC” published in The Edge Financial Daily on Tuesday.
IWC said it had signed a heads of agreement with IWH, which was represented by its controlling shareholder Lim, in relating to the proposed merger plan.
The proposed asset acquisitions are conditional upon the success of the merger plan. However, the two proposals are not inter-conditional.
According to the announcement, RCPS can only be converted into IWH shares when the company has generated a cumulative profit after tax of more than RM1 billion post restructuring exercise. However, IWH can redeem RCPS at any time without conditions attached.
IWH currently holds a 38.34% stake in IWC. Meanwhile, Lim owns 63.1% in IWH through Credence Resources Sdn Bhd.