UMW Holdings buys 3.9m UMW Development shares from PNB

PETALING JAYA: UMW Holdings Bhd is acquiring 3.9 million shares in UMW Development Sdn Bhd (UMWD) from Permodalan Nasional Bhd (PNB) for RM17.74 million, in a move to consolidate its shareholding in UMWD.
In a filing with Bursa Malaysia yesterday, UMW Holdings said its wholly owned subsidiary UMW Corp Sdn Bhd (UMWC) and its 51%-owned subsidiary UMWD have entered into a share sale and purchase agreement (SSPA) with PNB for the proposed acquisition.
The proposed acquisition comprises 780,000 ordinary shares of RM1 each for a consideration of RM11.55 million and 3.12 million 7.4% cumulative redeemable preference shares of RM1 each for RM6.19 million.
“The proposed acquisition will pave the way for UMW to consolidate its shareholding in UMWD as the group intends to consolidate its land bank in Serendah for future development,” it said.
The purchase consideration of RM17.74 million was arrived at based on the unaudited adjusted net tangible assets (NTA) of UMWD as at June 2016, which was determined after taking into consideration the average market valuation of land belonging to UMWD.
The parcels of land, which measure 616.218 acres in total, are located at Serendah in Selangor. The market valuation was carried out by three independent valuers namely Messrs Khong & Jaafar, Messrs Jones Lang Wootton and Messrs Raine & Horne in June 2015.
The valuation had also taken into account the future development potential of the land, market demand and the price of properties in the surrounding areas.
“The land belonging to UMWD will offer potential realisable capital value due to its strategic location, which is expected to enhance the future earnings of the group. Given the strategic location and the upcoming manufacturing plant for Rolls-Royce fan cases, the land is poised to be the catalyst for other industry players to establish operations in the proposed industrial park,” said the company.
The proposed acquisition will be financed entirely via internally-generated funds and is expected to be completed by Dec 31, 2016.
The PNB Group is a major shareholder of UMW Holdings, having 58.09% equity interest as at Oct 31, 2016 in the company, and is also a major shareholder of UMWD, having 39% equity interest in UMWD.
As the proposed acquisition is a related party transaction, UMW’s audit committee sought the opinion of PricewaterhouseCoopers (PwC) as an independent valuer, which deemed the proposed acquisition “fair and reasonable” following an independent assessment.