KUALA LUMPUR (Oct 15): Ideal United Bintang International Bhd's (IUBI) substantial shareholders Tan Sri Ooi Kee Liang and his spouse Puan Sri Phor Li Wei plan to inject their three private property companies into the group to bolster its current portfolio of development projects and enhance its profile as a property developer by participating in more projects which are profitable.
In a filing with Bursa Malaysia today, IUBI said it has today entered into a conditional sale and purchase agreement with Ooi and Phor for the proposed acquisition of Modular Platinum Sdn Bhd, Ideal Homes Properties Sdn Bhd and Premium Flame Development Sdn Bhd for RM353.09 million.
The proposed acquisition is deemed a related party transaction, as Ooi, who is IUBI executive chairman, and Phor, who is IUBI executive director, hold a combined 54.07% equity interest in IUBI through their shareholdings in ICT Innotech Sdn Bhd, and they are also the directors of the target companies and collectively hold the entire equity interest in them.
UBI said the purchase consideration of RM353.09 million represents a 34.7% discount to the indicative market value of the three companies of RM540.4 million, as appraised by Messrs Henry Butcher Malaysia (Penang) Sdn Bhd.
It also plans to undertake a proposed private placement of up to 393.08 million new shares or 30% of IUBI to raise RM200.5 million, of which the proceeds will be used for development costs of the three property projects.
IUBI is also proposing a 1 into 2 share split to improve the liquidity of its shares.
Assuming that the placement shares are issued at an indicative issue price of RM1.02 per placement share, or 51 sen after adjusting for the effects of the proposed share split, the indicative issue price is based on an 8.28% discount to the five-day volume weighted average price of IUBI shares of RM1.1121 as at Oct 12.
"The proposed private placement is conditional upon the proposed acquisition, and is expected to be implemented simultaneously with the proposed acquisition. In this respect, the company expects to identify the public investors to subscribe for placement shares prior to the issuance of the consideration shares," said IUBI.
Modular is currently jointly developing a 18,635 sq m parcel of land in Barat Daya, Penang with Koperasi Tunas Muda Sungai Ara Bhd. Known as Imperial Grande, the development comprises two blocks of apartments housing 938 units, and 65 units of shoplots/office and has a gross development value (GDV) of RM499.8 million.
As at Aug 31, the project is at 10% completion with the balance to be completed in three years.
Ideal Homes is also undertaking a joint development with Koperasi Tunas Muda of a 51,470 sq m parcel of land in Barat Daya, which has a GDV of RM665.4 million. The project is at 10% completion with the balance to be completed in four-and-a-half years.
Premium Flame, meanwhile, is developing two parcels of land in Barat Daya. The total estimated GDV of the Imperial Ville project is RM246.5 million and as at Aug 31, it is at 18% completion. The balance of the development is estimated to be completed in three-and-a-half years.
"Barring unforeseen circumstances, the proposals are expected to be completed by the first quarter of 2019," said IUBI.
At 4.34pm, IUBI shares were down one sen or 0.89% at RM1.12, with 710,200 shares done, bringing a market capitalisation of RM123.72 million.