KUALA LUMPUR (July 21): IJM Corporation Bhd will dispose of 100% of its stakes in Swarna Tollway Private Limited (STPL) to MAIF Investments India 3 Pte Ltd (MAIF), through its two units for a total consideration of INR10.03 billion or RM596.78 million.

IJMII (Mauritius) Limited (IJMIIM), a wholly-owned subsidiary via IJM Investments (M) Limited, had on July 20, 2015 entered into a conditional Share Purchase Agreement (SPA) with MAIF and STPL to dispose of 175 million equity shares of INR10 each and 14 million cumulative compulsorily convertible preference shares of INR10 each to MAIF, according to a filing by IJM to Bursa Malaysia yesterday.

The bulk of shares represent 70% of the issued and paid-up share capital of STPL. JMIIM will part it for a total consideration of INR6.85 billion (equivalent to about RM407.76 million).

“The expected gain from the disposal is approximately RM92.62 million,” said IJM in its filing.

Meanwhile, IJM Corp’s 95%-owned unit CIDB Inventures Sdn Bhd (CIDBI) will also dispose to MAIF, its 75 million equity shares of INR10 each and 6 million cumulative compulsorily convertible preference shares of INR10 each held in STPL.

The shares represent the balance 30% of the issued and paid-up share capital of STPL. It will be sold for a total consideration of INR3.18 billion (equivalent to about RM189.02 million).  

However, the disposal of CIDBI’s stake in STPL is subject to obtaining the necessary approvals from the authorities and within a period of 42 months from the completion of the disposal of 70% equity.

According to IJM Corp, STPL is a private limited company incorporated in India and the concessionaire for the improvement and upgrading of existing two-lane highways from km 52.8 to km 163.6 of Tada-Nellore section and km 217 to km 252 of Nandigama-Ibrahimpatnam section of the National Highways No. 5 and No. 9 respectively in Andhra Pradesh, India on a Build-Operate-Transfer basis.

“The total consideration of the Disposal was arrived at on a willing-buyer-willing seller basis, after taking into consideration the discounted future cash flows of the [highways] project,” IJM Corp said.

It also declared that none of the directors or major shareholders of the company or persons connected with them, has any interest, direct or indirect, in the disposal of 70% equity, and no approval of shareholders is required.

Shares in IJM Corp (fundamental: 1.1; valuation:0.8) rose 1 sen or 0.14% to RM7.01, after it resumed trading at 10am today. As at 10.43am, 65,400 units have changed hands.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)