CHINA Railways Engineering Corporation (CREC) will not acquire equity stakes in listed companies in Malaysia, including Titijaya Land Bhd, says its general manager Cai Zemin.
Cai is refuting talk that CREC is among some Chinese-based firms that are keen on buying an equity stake in Titijaya.
Cai tells The Edge that that CREC will only form partnerships with the local companies, but not acquire stakes.
The partnership with Titijaya is mainly because CREC needs a local partner that is familiar with the domestic operating environment in Malaysia.
“We don’t think it is necessary to be an equity holder,” says Cai.
The market talk of possible new Chinese shareholders has lifted Titijaya share price.
Titijaya Land recently partnered CREC to undertake a mixed-use development on a 6.06-acre piece of leasehold land at Embassy Row, Jalan Ampang, with an estimated gross development value of RM2.1 billion.
A share agreement was entered into between Titijaya’s wholly-owned subsidiary Titijaya Resources Sdn Bhd (TRSB) and CREC’s subsidiary CREC Development (M) Sdn Bhd, and Chan Peng Kooh and Rafidah Menan for the proposed purchase of 10.44 million shares, representing the entire share capital of Ampang Avenue Development Sdn Bhd, for a total of RM80 million.
Upon the deal’s conclusion, Titijaya and CREC Development will hold stakes of 70% and 30% respectively in Ampang Avenue.
Under the partnership, TRSB will take the lead in sales, marketing, credit management and administration. CREC Development will monitor, manage and supervise day-to-day construction and operational related matters.