Monday, October 28, 2013

Tebrau - privatisation

The market is rife with rumours of a pending corporate exercise involving Johor property counter Tebrau Teguh Bhd.

The market rumours included the possibility that Tebrau could be made a privatisation candidate by its major shareholder Tan Sri Lim Kang Hoo.

In 2012, Lim, who controls Tebrau via Iskandar Waterfront Holdings Sdn Bhd (IWH), had triggered a MGO for the company after he bought an additional 33.15% of shares from Kumpulan Prasarana Rakyat Johor Sdn Bhd (KPRJ), bringing his stake to 47.16%.

He had paid RM168.7mil or 76 sen per share then and said he intended to maintain the listing status of Tebrau.

KPRJ currently (Oct 2013) still owns 8% of Tebrau.

Assuming that Lim now wants to buy out minorities at the current price of RM1.43, he would have to fork out about RM500mil. However, banking sources said that it might be challenging for Lim to raise the funding required for such a buyout.

Meanwhile, other sources reckoned that Tebrau is in focus because it is close to inking a deal to dispose some of its prized Johor land to a major Malaysian property developer.

As at June 2012, the company had about 408ha of undeveloped land in Iskandar Malaysia.

Another possibility is that Lim could be looking to embark on a fund-raising exercise aimed at raising money to carry out property development projects on those parcels of land.

Lim, who is the executive vice-chairman of Tebrau, controls IWH via Credence Resources Sdn Bhd.

IWH is the master developer of several developments including Danga Bay, Iskandar Waterfront and the central business district of Johor. Its 1,619ha forms part of Iskandar Malaysia’s 221,707ha.

Initially slated for a listing in the fourth quarter, IWH’s impending listing which is expected to raise up to RM3bil, has likely been delayed to the first half of 2014.

For the first six months to June 30, Tebrau made a net profit of RM5.56mil or 0.83 sen per share on a revenue of RM96mil against a net profit of RM1.78mil or 0.26 sen per share on a revenue of RM58.7mil for the same period a year earlier.

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