Yi-Lai, Aspen RM550m RTO deal aborted

PETALING JAYA: The proposed reverse takeover (RTO) of Yi-Lai Bhd by Penang-based property developer Aspen Vision All Sdn Bhd has been scrapped, after the Securities Commission (SC) decided against waiving a minimum profit track record requirement for Aspen last week.

In a filing with the stock exchange, Yi-Lai, a ceramic tile manufacturer, said it and the parties involved have decided not to extend the validity of the head of agreement (HOA), which lapsed on Sunday.

The HOA was for the acquisition of Aspen by Yi-Lai for RM550 million, which would have resulted in an RTO of Yi-Lai as the purchase sum was to be partly satisfied through the issuance of new Yi-Lai shares.

Last Friday, the SC announced that Aspen and its subsidiaries would need to comply with its equity guidelines, which requires them to have a minimum three-year profit record.

As the earliest incorporation date of a subsidiary of Aspen was on Jan 15, 2013, it does not fulfill the requirement of having an operating history of at least three full financial years up to its financial year ended Dec 31, 2015. 

The SC, in not approving the application to waive compliance to the guideline, also took into consideration various matters. This included the fact that the Aspen Group entered into its first sale and purchase agreement for a piece of land for its property development business in October 2013, and that it first recorded operating revenue in September 2015.

Yi-Lai shares rose 1 sen to close at 83 sen yesterday after falling 12.3% last Friday. A total of 386,800 shares were traded.

Worth noting is that Aspen is partnering with Ikano Pte Ltd for a mixed-up development project called Aspen Vision City in Batu Kawan, Penang with a gross development value of RM8.4 billion. The first Ikea store in the northern region will also be there.

Spanning over 245 acres, Aspen Vision City, which consists of condominiums, shop offices, serviced suites, hotels, office tower, financial hub, medical centre and international school, is located at the landing point of the Second Penang Bridge.

The entire project is expected to be completed within the next 10 years with the first phase by 2018.