Malaysia developer Eco World Int'l begins IPO process, may list in April

Kuala Lumpur

PROPERTY developer Eco World International Bhd (EWI) has kicked off the process of initial public offering (IPO) with the signing of three agreements, including a share subscription deal with GuocoLand to take up 27 per cent of its enlarged paid-up capital.

Targeted to raise over RM2 billion (S$636 million), EWI's IPO appears set to be the largest in Malaysia this year, attracting participation from nearly all the local banks. The company is expected to list on the mainboard of Bursa Malaysia in April.

EWI signed a retail underwriting agreement with CIMB Investment Bank, Maybank Investment Bank and Hong Leong Investment Bank as joint managing underwriters and joint underwriters, and with Alliance Investment Bank, AmInvestment Bank and RHB Investment as joint underwriters. CIMB and Maybank are also the IPO's joint global coordinators.

The six banks will underwrite the entire retail offering comprising 408 million shares representing 17 per cent of EWI.

Malaysia's two largest funds, the Employees Provident Fund and Permodalan Nasional Bhd, are also in the picture, both agreeing to subscribe to an aggregate of 140.4 million shares representing more than 30 per cent of the IPO shares allocated under the institutional portion of 18.7 per cent of the total.

At the agreements' signing in Kuala Lumpur on Monday, EWI president and chief executive Teow Leong Seng said Eco World Development Bhd (EW) had obtained shareholders' approval for the subscription of a 27 per cent stake in EWI.

EW shareholders also approved the shareholders' agreement with GuocoLand and Liew Kee Sin, who previously headed SP Setia but later left to join EW which he helped to set up. Mr Liew will own 10.3 per cent of EWI.

Mr Teow said the share subscription agreement is a follow-through on the shareholders' agreement in October between EW, GuocoLand and Mr Liew to regulate their relationship with one another as major shareholders of EWI going forward.

Later at a media briefing, Mr Teow said GuocoLand has requested the right to be EWI's joint-venture partner in the UK, China and Singapore should EWI undertake any project in those countries.

GuocoLand has operations in those markets and it would make for a smart partnership, he said but stressed EWI's current focus is on the UK and Australia. "I think the markets are big enough for us to be there for a while."

EWI has three projects in the UK and another in Sydney which as at end-December had notched up cumulative sales of RM6.3 billion out of an estimated gross development value of RM12.9 billion.

Some 2.15 billion or 89.7 per cent of EWI's enlarged capital of 2.4 billion shares would consist of new IPO shares. The public portion is 2 per cent as the EW shareholders would be allocated 10 per cent of the retail offering and EWI and EW directors and employees 5 per cent.