KUALA LUMPUR: Eco World Development Group Bhd is looking at a third quarter 2015 (3Q15) listing for its special purpose acquisition company (SPAC) called Eco World International Bhd (EWI), said its chairman Tan Sri Liew Kee Sin.
He said the group expects to receive the Securities Commission Malaysia’s (SC) approval by June this year, for EWI to list on the Main Market of Bursa Malaysia in 3Q. The SPAC’s listing application was submitted at the end of last year.
On whether the group is facing difficulties getting approval for the SPAC’s listing, Liew said yes, given that “we are the pioneers” of property SPACs in Malaysia.
“There is a lot of regulatory compliance that we have to follow. I don’t think we are the only one that is slow, I think that every SPAC’s listing is slow,” he told reporters on the sidelines of Invest Malaysia Kuala Lumpur yesterday.
“It’s a new property SPAC, so I guess that is why it’s taking a long time to get the SC’s approval,” Eco World chief financial officer Datuk Heah Kok Boon said. He noted that SPACs currently listed on Bursa Malaysia are all oil and gas companies.
Eco World (fundamental: 0.5; valuation: 0) had applied for the first property SPAC, which will be led by former S P Setia Bhd senior management, to list on Bursa to raise some RM1.87 billion for it to venture overseas. Eco World had expressed its interest in subscribing to 30% of EWI’s enlarged issued capital for RM562.5 million. The stake comprises 1.125 billion EWI shares at an indicative issue price of 50 sen apiece that comes with 1.125 billion free detachable warrants.
Meanwhile, Eco World will not propose any dividend for its shareholders for the next two to three years as it is still in a growth phase, Heah said. The property developer will be focusing on its future growth and is undertaking several corporate exercises, including a proposed rights issue with warrants and a 20% proposed private placement to fund all the acquisitions and future working capital of the group, he added.
“If funds from the rights issue and private placement are used to pay dividends then it’ll be like borrowing your (shareholders’) money to pay you back right?” Heah added.
Eco World president and chief executive officer Datuk Chang Khim Wah is positive on the residential property market in Iskandar Malaysia, Johor, despite admitting that there is currently a glut in the area.
A research note issued by Maybank Investment Bank Bhd on April 14 had urged investors to be cautious about the region, noting that property transactions and prices in Iskandar Malaysia have been dropping.
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This article first appeared in The Edge Financial Daily, on April 24, 2015.