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Tuesday, November 10, 2009

Damansara Realty plans revamp to strengthen footing

DAMANSARA Realty Bhd (DBB) is planning a corporate restructuring to carve out its unprofitable businesses and streamline revenue streams to benefit its shareholders.

It has proposed to exchange its entire paid-up share capital with shares of its wholly-owned subsidiary, Insan Kualiti Sdn Bhd (IKSB), with cash payment to existing DBB shareholders.

The proposal will involve exchanging 250.14 million DBB shares of 50 sen each with 150.08 million shares of 50 sen each in IKSB and a cash payment amounting to RM80.05 million.

The cash payment is 0.6 new IKSB share and payment of about 32 sen in exchange for every one DBB share.
It also proposed for the IKSB to buy from Johor Corp (JCorp) entire Tanjung Langsat Port Sdn Bhd (TLP) for about RM249.05 million and the entire equity in TPM Technopark Sdn Bhd (TPM) for RM54.8 million.

The total acquisition price of about RM303.85 million will be paid for by issuing 229.73 million new IKSB shares at 80 sen each and the remaining RM120.10 million to be set off against an amount due from JCorp.

DBB also proposes that IKSB sells 250.14 million DBB shares to JCorp for RM200.11 million, of which RM80 million will be paid for by cash and the remaining to be set off against an amount due to JCorp.

The corporate restructuring will eventually involve the transfer of DBB's listing on Bursa Malaysia to securities of IKSB.

DBB said the corporate restructuring offers an opportunity for its existing shareholders to participate in the potential long-term growth of the new businesses to be injected, particularly the industrial development at the Tanjung Langsat Industrial Area and Tanjung Langsat Port services business.

TLP is expected to be the revenue and profit driver for the IKSB group through the Tanjung Langsat Port services business.

It said it would allow IKSB to rationalise its business, thus enabling it to focus on the business and prospects of TLP and TPM.

By Business Times (Posted on 9 Nov 2009)

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