EPF, PNB cornerstone investors of Eco World International

KUALA LUMPUR: Eco World International Bhd (EWI) yesterday signed agreements to secure Employees Provident Fund (EPF) and Permodalan Nasional Bhd (PNB) as its cornerstone investors, and accord Singapore property company Guocoland Ltd a 27% strategic stake in the soon to be listed company.

EWI president and CEO Datuk Teow Leong Seng said response from investors has been good so far, and hopes that the initial public offering (IPO)’s joint global coordinators, CIMB Investment Bank Bhd (CIMB IB) and Maybank Investment Bank Bhd (Maybank IB), will arrive at “the right IPO price”.

“I hope the final price will be attractive, with a fair and reasonable valuation,” he told reporters at the signing of three key agreements yesterday.

Note that the illustrative IPO price in EWI’s circular to shareholders is RM1.20, which represents a 12% premium to its net asset per share of RM1.07. Teow said it is now entering the final stage of the book-building process.

Under a master cornerstone placement agreement signed yesterday, EPF and PNB as cornerstone investors, agreed to subscribe an aggregate of 140.4 million IPO shares representing more than 30% of the institutional offering or about 6% of the enlarged paid-up capital post listing.

Teow said it will continue to promote the balance of the institutional offering to regional investors from Malaysia, Singapore and Hong Kong. EWI also signed a retail underwriting agreement with six banks.

CIMB IB, Maybank IB and Hong Leong Investment Bank Bhd will be joint managing underwriters and joint underwriters, while Alliance Investment Bank Bhd, AmInvestment Bank Bhd and RHB Investment Bank Bhd will be joint underwriters.

The six banks will underwrite EWI’s entire retail offering comprising 408 million IPO shares, representing 17% of its paid-up capital.The signing of these agreements will be followed by the issuance of EWI’s prospectus in respect of the IPO, which is expected in March. Teow said it is on track to list EWI by early April.

He also said that EWI may start paying dividend to shareholders when it begins recognising sales from its projects in the UK and Australia, from financial year ending Oct 31, 2019. However, this is subject to its cashflow position.

Pursuant to the IPO, EWI expects to issue up to 2.153 billion new shares (IPO shares), which together with Tan Sri Liew Kee Sin’s 246.54 million shares, brings EWI’s enlarged paid-up capital to 2.4 billion shares post-listing.

On EWI’s projects, Teow said it has sold RM6.3 billion out of a total gross development value of RM12.9 billion, with a 64% take-up rate across its four projects in London and Sydney. The group expects to achieve 100% sales for all four projects within a year.

He said it will continue acquiring land but will not sign on more projects until after the listing. EWI’s focus remains in the UK and Australia for now, as the segment it is in is still active.