Oct 06, 2020, 10:00 EST
Bronx, United States, Oct 06, 2020, 10:00 /Comserve / -- UEM Group Berhad, on the evening of Oct. 2, 2020, had submitted a letter to the Boards of Eco World Development Group Berhad (Eco World) and UEM Sunrise Berhad (UEM Sunrise).
KUALA LUMPUR, Oct. 05, 2020 – UEM Group Berhad, on the evening of Oct. 2, 2020, had submitted a letter to the Boards of Eco World Development Group Berhad (Eco World) and UEM Sunrise Berhad (UEM Sunrise). The letter contained a proposal for a potential merger between the two companies.
The execution of the proposed merger will create Malaysia’s largest property company. This company is then expected to be the top of the line multi-product developer. It will not only have a strong presence in all segments but also encourage long term growth and value creation.
Owning a 66.1% equity stake in UEM Sunrise, UEM Group has been exploring the possibility of a merger with other property developers. But it has a belief that the merits are stronger with Eco World. The merger will provide an opportunity for the company that is already government-linked to create a partnership with the private sector in order to create the largest property developers in Malaysia. The projected Gross Development Value (GDV) is estimated to be RM 173.2 billion along with a total land bank of more than 17,000 acres locally. This industry consolidation would create value for all shareholders, as believed by UEM Group.
In the event that the proposal is signed, UEM Sunrise will become enlarged and will retain the listing status on Bursa Malaysia. Apart from this, UEM Group will hold the title of the single largest shareholder of the enlarged UEM Sunrise. It will have a 43% equity stake while Eco World’s substantial shareholders will have a 24.2% equity stake. There would also be a collective stake of more than 50% by government-linked investment companies which also include that of UEM Group.
UEM Sunrise, in June 2020, announced its financial results for the first quarter ended March 31, 2020. The company recorded a loss of RM 22 million for the quarter. In the same quarter last year, the company’s revenue was recorded at RM 419 million as compared to RM 196 million this year.
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