PRG plans to subscribe up to 29.9% stake S'pore-listed property firm

From left: Lua, PRG Group executive vice chairman Datuk Yau Kok Seng, Capital World corporate advisor Datuk Eric Tan Eng Huat and Siow at the signing ceremony of the MoU in Johor Bahru on Nov 5. Photo by PRG

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KUALA LUMPUR (Nov 5): PRG Holdings Bhd plans to subscribe for up to 29.9% stake in Catalist-listed Capital World Ltd, which is engaged in property development activities in Malaysia.

The proposed investment will allow PRG to participate in Capital World's flagship project in Johor Baru, featuring 4 million sq ft of integrated development comprising a shopping mall, hotel, serviced suites and serviced apartments.

At 3.37pm, shares in Capital World were trading at S$0.06, valuing it at S$72.44 million. A back-of-the-envelope calculation suggests a 29.9% stake would amount to some S$21.7 million.

In a filing with Bursa Malaysia today, PRG said it has today entered into a non-binding memorandum of understanding (MoU) with Capital World for the proposed investment on the terms and subject to the conditions to be set out in a definite agreement.

"The parties will as soon as practicable and in good faith, negotiate and execute the subscription agreement within two months from the date of this MoU," it added.

In a separate statement, PRG group managing director Datuk Lua Choon Hann said the proposed investment is part of the group's overall strategy to continue building up its property development and construction division in becoming one of the significant property players in Malaysia.

"We realise that there is tremendous synergy between both groups and we look forward to growing hand in hand with Capital World. Immediately, we can collaborate by introducing the medical and wellness elements in Project Capital City and future development projects which will enhance the appeal of Capital World's product offering.

"We believe that Capital World's niche business model of identifying joint venture opportunities in strategic locations to offer unique and innovative products to the market will allow us to stand out from stiff competition," Lua added.

Capital World executive director and chief executive officer Siow Chien Fu said the new financing will be used to fund existing development, as well as expedite the launch of new pipeline development projects.

At 3.22pm, PRG shares were unchanged at 77 sen today, with 50,000 shares done, bringing a market capitalisation of RM238.59 million.