Ecoworld buys LCBN and Mujur Zaman lands
17:09 Sep 27, 2017  |  By
Ecoworld buys LCBN and Mujur Zaman lands

In September 2015, Eco World Development Group  Berhad (Eco World) through it's wholly owned subsidiary, Paragon Pinnacle Sdn Bhd bought lands of LCBN Development Sdn Bhd (LCBN) and Mujur Zaman Sdn Bhd (Mujur Zaman) together with the lands of several other companies.

It was announced to the Bursa Malaysia on September 22nd, 2015.See here.

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Pada September 2015, Eco World Development Group  Berhad (Eco World) melalui anak syarikat sepenuh, Paragon Pinnacle Sdn Bhd membeli tanah LCBN Development Sdn Bhd (LCBN) dan Mujur Zaman Sdn Bhd (Mujur Zaman) beserta tanah-tanah lain kepunyaan beberapa syarikat lain.

Ia diumumkan kepada Bursa Malaysia pada September 22nd, 2015. Lihat di sini.


On behalf of the Board of Directors of EW Berhad (“Board”), RHB Investment Bank Berhad (“RHB Investment Bank”) wishes to announce that PPSB, had on 22 September 2015, entered into the following agreements:-

(i) a conditional sale and purchase agreement with Mujur Zaman Sdn Bhd (“MZSB”) for the proposed acquisition of 11 pieces of land all in Mukim Ijok, District of Kuala Selangor, State of Selangor measuring in aggregate approximately 1,107.30 acres for a total cash consideration of RM578,807,856.00;

(ii) a conditional sale and purchase agreement with Ringgit Exotika Sdn Bhd (“RESB”) for the proposed acquisition of a piece of land in Mukim Ijok, District of Kuala Selangor, State of Selangor measuring in aggregate approximately 86.35 acres for a total cash consideration of RM45,136,872.00;

(iii) a conditional sale and purchase agreement with Liputan Canggih Sdn Bhd (“LCSB”) for the proposed acquisition of 10 pieces of land all in Mukim Ijok, District of Kuala Selangor, State of Selangor measuring in aggregate of approximately 527.43 acres for a total cash consideration of RM218,261,082.60;

(iv) a conditional sale and purchase agreement with MZSB for the proposed acquisition of the acquisition of three (3) pieces of land all in Mukim Ijok, District of Kuala Selangor, State of Selangor measuring in aggregate of approximately 206.51 acres for a total cash consideration of RM146,722,701.18; and

(v) a conditional sale and purchase agreement with LBCN Development Sdn Bhd (“LDSB”) for the proposed acquisition of a piece of land in Mukim Ijok, District of Kuala Selangor, State of Selangor measuring in aggregate approximately 270.81 acres for a total cash consideration of RM192,407,024.87.

(MZSB, RESB, LCSB and LDSB are collectively referred to as the “Vendors”).

Further details of the Proposed Acquisitions are set out in the attachment below.

 

This announcement is dated 22 September 2015. 

 

The Star report dated September 26th 2015 here described the deal as another new bold move by Eco World. The deal was described in the etract below:

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Laporan The Star brtarikh September 26hb 2015 sini menggambarkan urusniaga ini sebagai satu lagi tindakan berani Eco WOrld. Urusniaga ini digambarkan dalam sedutan berikut:

 

On Tuesday, Eco World announced in a filing with Bursa Malaysia that it proposed to buy 2,198.4 acres of leasehold land in Ijok, Kuala Selangor for a RM1.181bil.

The land is located at the north-west of Klang Valley and is 45km from the Kuala Lumpur city centre, 40km from the Petaling Jaya city centre and 18km from the Sungai Buloh town centre.

Its wholly-owned unit Paragon Pinnacle Sdn Bhd (PPSB) had entered into five separate sales and purchase agreements with Mujur Zaman Sdn Bhd, Ringgit Exotika Sdn Bhd, Liputan Canggih Sdn Bhd and LBCN Development Sdn Bhd to buy the land.

Eco World’s rationale for the acquisitions is that it would give the company sizeable tracts of land in the north-western growth corridor of the Klang Valley. Furthermore, such sizeable Klang Valley landbank comes as a rare opportunity. The company has already identified three projects to develop, including a 1,400-acre mixed-eco township project to be known as “Eco Gardens”, consisting mainly of landed and high-rise residential homes, among others.

It intends to build a 518-acre integrated gated industrial hub to be known as “Eco Business Park V”, and about 280 acres of affordable homes to be known as “Laman Indah”.

The estimated GDV is RM15bil over a 15-year development period based on the preliminary management estimates.

Analysts were surprised at the scale of the acquisition, saying that it would definitely put a strain on Eco World’s balance sheet, and nudge its net gearing levels up. If it shoulders the acquisition on its own, Kenanga Research says that this would increase its estimated net gearing for the financial year ending Oct 31, 2016 to 1.09 times from 0.73 times currently.

“We were taken by surprise by the magnitude of the land size especially when Eco World’s net gearing is expected to exceed the comfort levels of 0.5 times over the 2016 to 2017 estimate,” it says.

However, Eco World clearly indicated that it intends to fund the acquisition using a mix of internal funds, bank borrowings and, or equity funding. And to this extent, it is inviting institutional, private equity and corporate partners to jointly fund PPSB.

It is willing to let go of a 70% stake, while 30% is the minimum stake it wants to keep in PPSB, for it to be able to enjoy meaningful share of the development profits.