Friday 29 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on June 14, 2021 - June 20, 2021

The aborted land transaction between privately owned Iskandar Waterfront Holdings Sdn Bhd (IWH) and Ekovest Bhd once again raises the question of whether the former will see a public listing eventually.

In the deal, IWH, which is 63.13%-owned by Tan Sri Lim Kang Hoo, was to dispose of parcels of land measuring 96.27 acres to Ekovest, which is a related company. Lim is also a substantial shareholder of Ekovest.

The reason given for the termination of the transaction valued at RM944.6 million was the prolonged pandemic.

It is hard to understand how the pandemic can be the reason for the termination of the deal. After 18 months, Malaysia is finally rolling out vaccines to reduce the rate of infections. In the next few months, the lockdown due to the pandemic is likely to be relaxed.

The land deal was first proposed in November 2019 at a price tag of RM1.1 billion. However, in March this year, the deal was rescinded. Both companies entered into a fresh agreement in April at a reduced price of RM944.6 million. Last Friday, Ekovest announced that both parties had agreed to terminate the transaction.

The land is part of the 4,000 acres belonging to IWH that are located in Johor and face Singapore’s shores. The transaction would have valued the land at RM238 per sq ft. If the proposal had been approved, it would have set the benchmark for IWH’s land bank.

With the deal having fallen through, the benchmark valuation of the land has been further delayed. Lim is probably hoping to obtain a better value for the land by waiting out the pandemic. Moreover, a sale to a third party would add more credibility to the valuation of the land, instead of to Ekovest, which is a related party.

In addition, a listing of IWH would help Lim raise the much needed funds for the development of Bandar Malaysia, of which it is the master developer.

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