UEM World Bhd plans to become a pure property company by spinning off its cement and drug-making businesses in a sale to its shareholders.
UEM Land Sdn Bhd, its property unit that's overseeing Malaysia's biggest property project in Johor, will be listed while UEM World will be de-listed under its latest restructuring exercise.
"The exercise is carried out to provide the platform for further growth of our business. UEM Land in recent periods has increasingly become the driver for the share price of UEM World," UEM World managing director Datuk Ahmad Pardas Senin said in a media briefing in Kuala Lumpur yesterday.
UEM Group Bhd, which holds 52 per cent of UEM World, will spend roughly RM2 billion to RM3 billion of its internal funds for the restructuring exercise.
He said many investors in UEM World were mainly interested in UEM Land and this exercise would allow them to participate in a pure property company.
UEM Group can then focus its efforts primarily as developer and owner of infrastructure assets, specifically around PLUS and its expertise in project management and engineering and construction.
At the moment, UEM World has three components under its umbrella which include four listed subsidiaries, UEM Land and the remaining unlisted businesses.
In the first phase, UEM World will sell its entire stake in UEM Builders Bhd, Opus Group Bhd, Pharmaniaga Bhd and Cement Industries Malaysia Bhd (CIMA).
This will be carried out through a restricted offer for sale (ROS) to shareholders of UEM World at a 15 per cent premium from a one-month weighted average market price.
"UEM Group will buy all the shares that are not acquired by the shareholders under this proposal to ensure that it will be a success," said Ahmad Pardas.
Under the second step, a shareholder with 100 UEM World shares will receive 125 UEM Land shares.
To participate in the ROS, a shareholder will have to pay RM120.26 to receive a basket of 35 shares in UEM Builders, 21 shares in Opus, five shares in Pharmaniaga and five shares in CIMA.
UEM World will also sell off all its unlisted businesses and undertakings to UEM Group for RM13.9 million.
As UEM World turns into a shell company, cash realised under the ROS and disposal of unlisted businesses exercise will be returned to shareholders of UEM World.
This means that a shareholder with 100 UEM World shares will get RM125.82 cash under a capital repayment exercise.
Currently, UEM Land shareholders are UEM World at 71.5 per cent and UEM Group at 28.5 per cent. After the exercise, UEM Group will own 65.7 per cent of the newly listed property unit with the remaining stake owned by other shareholders of UEM World.
The corporate restructuring is expected to be completed in September.
By New Straits Times (by Adeline Paul Raj and Jeeva Arulampalam)
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