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Friday, September 5, 2008

TA to list property unit

Group also seeks investment banking licence

TA ENTERPRISE Bhd has outlined plans to list its property business and apply for an investment banking licence as the group seeks to expand.

The group, 33.7 per cent held by Datuk Tony Tiah Thee Kian, has proposed to sell its property units to TA Global Bhd in an all-share deal and raise about RM613 million in an initial public offering (IPO).

The IPO, arranged by AmInvestment Bank Bhd, comes at a time when the stock market is sluggish, having lost some 25 per cent this year.

"The proposed reorganisation and listing will unlock the value of its strategically located properties and realise its investment in the said properties," TA said in a statement to Bursa Malaysia yesterday.

TA will sell all its shares in TA Properties Sdn Bhd, Sanjung Padu (M) Sdn Bhd and Wales House Trust to TA Global Bhd for RM1.75 billion. Wales House owns the Radisson Plaza Hotel in Sydney, Australia.

This will be satisfied with 2.24 billion new TA Global shares of 50 sen each priced at 50 sen apiece.

TA Global will also issue 1.22 billion new irredeemable convertible preference shares of 50 sen each, priced at 50 sen a unit.

The sale will result in a capital gain of RM924.5 million for TA.

In addition, TA will sell some houses in Taman Duta to TA Global for RM26.9 million in an all-share deal.

TA Global will then carry out a 10-for-27 rights issue involving 860 million shares.

Subsequently, TA Global will offer 350 million new shares, priced at an indicative 50 sen, to public investors under its IPO.

At the same time, TA will offer 875 million existing TA Global shares to Bumiputera investors approved by the Minister of International Trade and Industry. This will raise some RM438 million.

"TA will utilise a portion of the proceeds to apply for an investment banking licence. The remaining cash proceeds will be utilised for the future working capital of TA," it said.

TA plans to list TA Global, which will have a paid-up capital of RM1.75 billion, on the main board of Bursa Malaysia.

Finally, TA will distribute its capital to shareholders. However, instead of a cash payment, it will give investors 1.43 billion TA Global shares and all of TA Global's preference shares.

In the end, TA will hold at least 24.3 per cent, or 849 million shares, of TA Global. It expects to complete all of the proposals by the year-end.

Shares of TA fell half a sen to close at 82 sen yesterday.

By New Straits Times

TA Enterprise to list property division on main board

PETALING JAYA: TA Enterprise Bhd (TAE) has proposed to list its property division under TA Global Bhd on the Bursa Malaysia main board.

“The proposed reorganisation and listing would unlock the value of its strategically located properties and realise the market value of the said properties,’’ TAE said in a statement yesterday.

The exercise was expected to be completed by the end of the year. TAE said it expected to recognise a capital gain of about RM924.9mil from the exercise.

The proposed exercise will enable the company to streamline its operation into two separate core businesses, in financial services and properties division.

Under the plan, TAE will inject its property assets held under TA Properties Sdn Bhd, Sanjung Padu Sdn Bhd, Wales House Trust and Taman Duta Residences in exchange for shares in TA Global worth a total of RM1.75bil.

Subsequently, TA Global will undertake a 10-for-27 rights issue exercise and a public issue of about 350 million new shares at an indicative initial public offer (IPO) price of 50 sen per share.

It also proposed an offer for sale of 875 million shares in TA Global to bumiputra investors.

TAE is also proposing a capital distribution to its shareholders that will cut its share capital, share premium reserve and retained earnings. As a result, TAE’s par value would be reduced to 50 sen from RM1 currently.

Upon completion of the proposed capital distribution and listing, TAE will hold at least 24.3% equity interest in TA Global.

“The total proceeds from the proposals, via offer for sale, will amount to RM437.5mil,’’ TAE said.

TAE will utilise a portion of the proceeds to apply for an investment banking licence and the remaining for future working capital of the group.

In a separate announcement, TAE said its unit TA Global had entered into a sale and purchase agreement to acquire Coast Whistler Hotel in British Columbia for C$33mil (RM107mil).

The 193-room hotel is located 125km north of Vancouver and is the group’s maiden foray into Canada hospitality industry.

“The proposed cost of renovations to upgrade the hotel shall be borne entirely by TA Global and is estimated to amount C$30mil (RM97mil),’’ it said.

By The Star

Ho Hup seeks JV partners

PETALING JAYA: Ho Hup Construction Co Bhd, which suspended its managing director a week ago, is looking for joint-venture partners to develop its 24.3ha of commercial land in Bukit Jalil. The project could potentially help the financially ailing company to turn around.

It is understood there are several offers from local and foreign companies, including some very big names. The new shareholders of Ho Hup are evaluating them to finalise a deal soon.

“It is important to get joint-venture partners to undertake the development as Ho Hup on its own is unable to do so because it faces a liquidity crunch,’’ a source said.

There is a plan for a mixed development which could cost several hundred million ringgit. The land, sited next to Bukit Jalil golf course, is said to be worth around RM300mil.

Ho Hup told Bursa Malaysia last Thursday that it had suspended managing director Datuk Low Tuck Choy until further notice for certain alleged breach, commission and omission of duties and responsibilities.

Ho Hup, founded by Tuck Choy’s late father Low Chee, is a PN17 company with liabilities of over RM100mil.

In its heyday, Ho Hup won most of the prized construction projects in the country. There are several reasons for its current state, over-expansion being a major one.

The winds of change are imminent at Ho Hup, the country’s oldest construction company that has lost its lustre. Extreme System has emerged as the major shareholder with 27.95% stake. The Low family owns 22.66%.

The company is now managed by an executive committee (exco) led by chairman Datuk Vincent Lye. The other four exco members are Tuck Choy, his younger brother Teik Kien, Lee Chong Hoe and Lai Moon Chan.

Extreme System bought a 17.2% stake from UEM World Bhd for just over 40 sen a share. The rest of the shares were bought on the open market. Extreme System is owned by Lye’s wife, Datin Viannie Damit. Lye is also a director of Minetech Resources Bhd, a quarry operator, and Magna Prima, a property developer.

Ho Hup’s board composition has also changed. It now includes Tan Sri Abdul Kadir Sheikh Fadzil (chairman), Lye, Tuck Choy, Teik Kien, Lee, Lai, Zainal Abidin Mohd Yusof and Mustapha Mohamed.

Ho Hup’s new team also wants to revive a link-house project in Bukit Jalil that has been abandoned for two years. It also has a 6.5ha residential land in Bukit Jalil that would be either developed or sold to raise funds for the firm, according to the source.

“It is a whole process to strengthen Ho Hup and aggressive steps are being taken to revive the company,’’ the source said. “The exco is looking into every financial and operational aspect to strengthen internal controls, address accountability issues and review processes.’’

Ho Hup, which has been reprimanded several times by Bursa for not submitting timely quarterly financial reports, had done so for both the 2008 first and second quarters since the new exco took charge.

The source said that showed the seriousness of the new team to get things done.

For the second quarter ended June 30, Ho Hup reported a wider net loss of RM9.4mil from a RM6.7mil loss a year earlier.

By The Star (by B.K. Sidhu)