The Employees Provident Fund (EPF) and Permodalan Nasional Bhd (PNB) have agreed on Monday to subscribe a total of 140.4 million shares in the highly-anticipated Initial Public Offering (IPO) of Eco World International Bhd (EWI), reported the Sun Daily.
This amount of stocks represents more than 30 percent of institutional offering or approximately 6.0 percent of the firm’s enlarged paid-up capital after the flotation.
Besides the two Malaysian companies, EWI secured a third cornerstone investor, Singapore-based property developer Guocoland, which has committed to acquire a 27 percent interest in the soon-to-be listed company.
In total, the company expects to issue as much as 2.153 billion new shares during the flotation. Including the 246.54 million stocks held by Eco World Development Group Chairman Tan Sri Liew Kee Sin, EWI’s overall number of shares in circulation is expected to surge to 2.4 billion post-listing.
According to EWI’s President and CEO Datuk Teow Leong Seng, investor response has been positive so far, and he hopes that the listing’s joint global coordinators, Maybank Investment Bank and CIMB Investment Bank, would settle on an appropriate price.
“I hope the final price will be attractive, with a fair and reasonable valuation,” he told the media, adding that they are now in the last phase of the book-building process.
Based on EWI’s circular to potential stockholders, the estimated IPO price stands at RM1.20 per share, translating to a 12 percent premium to its net asset value of RM1.07 per share.
Aside from the two aforementioned lenders, Hong Leong Investment Bank will also serve as joint managing underwriters, while the role of joint underwriters will be taken up by AmInvestment Bank, RHB Investment Bank Alliance Investment Bank. The six financial firms will market EWI’s entire retail IPO offer consisting of 408 million stocks or 17 percent of its paid-up capital.
Teow noted that the IPO prospectus is expected to be released in March, followed by the official listing in April.
EWI may also start giving out dividends to stockholders after it achieves sales in its developments in Australia and the UK for the financial year ending 31 October 2019. However, this will depend on the firm’s financial position by then.
According to Teow, they have sold RM6.3 billion worth of properties in four projects in London and Sydney, which have a combined gross development value of RM12.9 billion. This means it has found buyers for 64 percent of the available units, but all developments are expected to be sold out within a year.
Looking ahead, EWI plans to continue acquiring land bank, but it will not embark on more developments until the IPO is completed. Currently, it is focusing on UK and Australia due to their thriving property markets.
Image sourced from Berita Harian
Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email radin@propertyguru.com.my
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