E&O to list UK unit on LSE

KUALA LUMPUR: Eastern & Oriental Bhd (E&O) plans to list Eastern & Oriental Property (UK) Ltd (E&O UK), an indirect wholly owned unit, on the London Stock Exchange (LSE) to support its expansion in the UK.
In a filing with Bursa Malaysia yesterday, it said it had proposed to admit the entire shares and warrants of E&O UK to trading on Alternative Investment Market (AIM), the London Stock Exchange's international market for smaller growing companies.
"The board of directors of E&O UK are in the process of determining the issue/offer size for the proposed initial public offering (IPO), and the issue price for the issue shares and offer shares," E&O said.
Incorporated as Kamunting Tin Dredging Ltd in England and Wales in 1913, E&O UK changed to its present name in July 2012. E&O's original cost of investment in E&O UK was about RM8.81 million incurred in July 2008.
"The proposed admission (on AIM) provides a platform for E & O's existing assets and business in the UK to obtain a listing status in a country where the group has its business. The listing supports E&O's expansion strategy in the UK as it is expected to enhance the visibility of the group's property development and investment activities in the UK as well as increase brand awareness and further develop its brand equity," E&O said.
"The gearing of the E&O group is also expected to improve arising from the deconsolidation of E&O UK and its subsidiaries from the financial statements of the E&O group."
Through the proposed IPO, the E&O UK group will be able to strengthen its financial position and raise funds for the redevelopment of its real estate assets in London, namely ESCA House, Landmark House and Thames Tower into residential and mixed-used developments.
It said the proposed IPO further gave an opportunity for the entitled E&O shareholders and the eligible management personnel to take part directly in the growth and prospects of E&O UK.
The listing of E&O UK, whose holding company is E&O Property Development Bhd, will also facilitate an independent unit with a separate management team that is focused on growing the property development and investment activities of the E&O group in the UK.
In a separate announcement, E&O announced that net profit for its fourth quarter ended March 31, 2015, doubled to RM100.76 million from a year earlier despite a 37.7% lower revenue of RM143.04 million due mainly to a gain from an indirect unit's sale of 49% equity interest in Patsawan Properties Sdn Bhd for RM82.4 million cash in March last year.
For the 12 months period, net profit jumped 35% to RM152.35 million from RM113.24 million a year, while revenue dropped 10% to RM449.5 million mainly due to a decrease in the property segment.
E&O proposed to grant its shareholders dividends in the form of stocks at a ratio of one stock for every 50 units held – payment of a first and final single tier dividend by way of distribution of the company's treasury stock units to shareholders.
It estimated that the dividend per stock unit from this distribution will be equivalent to 3.8 sen per stock unit, which would be the highest nett dividend payout by E&O to date.