UEM Edgenta to sell stake in NZ unit for RM504m

PETALING JAYA: UEM Edgenta Bhd plans to dispose of its 61.2% equity stake in its New Zealand Stock Exchange listed subsidiary Opus International Consultants Limited (OIC) to WSP Global Inc, for NZ$161.1 million (RM504.2 million) cash to help pare down debts.
UEM Edgenta could receive another NZ$6.3 million should the board of OIC approve an up to NZ$0.07 per share cash dividend, bringing total proceeds to NZ$167.4 million.
The stock closed up seven sen at RM2.55 yesterday with 485,200 shares changing hands. It has a market capitalisation of RM2.12 billion.
The company said in a statement yesterday, the disposal will be made via its wholly owned subsidiary Opus International (NZ) Limited (ONZ). ONZ is a wholly owned subsidiary of Opus Group Bhd (OGB), which in turn is wholly-owned by UEM Edgenta.
WSP is a Canadian company listed on the Toronto Stock Exchange.
“It will also provide UEM Edgenta with the financial resources and enable management to focus on driving as well as supporting the organic growth and operational excellence initiatives in our core sectors spanning healthcare, infrastructure and real estate in key markets namely Malaysia, Singapore, Indonesia, Taiwan, India, other Southeast Asian countries and the Middle East region,” UEM Edgenta managing director and CEO Datuk Azmir Merican said.
The firm has entered into a lock-up agreement to sell its 61.2% shareholding via ONZ in OIC to WSP, subject to its shareholder approval at a general meeting expected to be convened in the fourth quarter of 2017.
The company’s major shareholder, UEM Group has provided an undertaking to vote in favour of the proposed disposal.
Under the proposed disposal, UEM Edgenta will retain OGB, an entity that focuses on project management and design consultancy operating in Malaysia and Indonesia, that has been drawing resources from OIC primarily in the asset management and consultancy businesses in the expressway sector.
OGB via its wholly owned subsidiary Opus International (M) Bhd (OIM) will continue to provide asset consultancy services in the two countries. This includes supporting UEM Group Bhd, the parent company of UEM Edgenta, in delivering the Pan Borneo Highway Project in Sabah.
The company said the proposed disposal of OIC is an opportunity for it to monetise its investment upfront at a healthy premium over the current market price.
It will also reduce its gross gearing from 0.8 times (post drawdown of sukuk of RM300 million in April 2017) to 0.4 times and provide the opportunity to sustain dividend payout to its shareholders in the future. Part of the proceeds will be used to repay loans taken for the acquisition of Asia Integrated Facility Solutions Pte Ltd, which was completed on Dec 15, 2016.
Despite the disposal, UEM Edgenta said it will still be able to draw on the experience and resources of OIC albeit as a third-party consultant and by extension, WSP’s engineering capabilities.