EPF buys stake in two real estate funds from CIMB for RM122.8m

PETALING JAYA: The Employees Provident Fund (EPF) is buying CIMB Group Holdings Bhd’s stakes in two private equity funds based in Singapore for A$37.13 million (RM122.8 million), in a related party transaction.
In a filing with the stock exchange, the banking group said its wholly owned subsidiary CIMB Bank had entered into a sale and purchase agreement with EPF for the disposals of a 12.42% stake in CIMB-TrustCapital Australian Office Fund No. 1 LP and 13.7% equity interest in CIMB-TrustCapital Australian Office Fund No. 2.
The first fund made a net profit of A$13.44 million, while the second fund a net profit of A$6.76 million for the financial year ended Dec 31, 2015.
Both funds are invested in Grade A and Grade B+ commercial office assets in Central Business Districts of Melbourne, Sydney and Canberra with secondary focus on Brisbane and Perth.
CIMB said the disposals are in line with its aspirations to further streamline and focus on its core banking businesses. Proceeds from the disposals will be used for repayment of bank borrowings and future working capital requirements.
The expected gain from the disposals is about A$8.2 million based on its cost of investment of A$37.2 million.
EPF owns a 13.98% stake in CIMB, hence the disposals are deemed as a related party transaction.
In addition to that, CIMB chairman Datuk Seri Nazir Abdul Razak is deemed interested in the disposals by virtue of him being a professional representative on the investment panel of EPF. Nazir has abstained and will continue to abstain from deliberating and voting on the disposals at the relevant board meetings.