Thursday, 4 May 2017

(The Star) IWC shares tumble ahead of aborted deal

PETALING JAYA: Iskandar Waterfront City Bhd’s (IWC) share price tumbled 14 sen or 4.35% to close at RM3.08 yesterday, ahead of TRX City Sdn Bhd announcing that the share sale agreement entered between the Government through TRX City, Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (M) Sdn Bhd (CREC) had lapsed.

The stock, which was at its highest at RM3.22 on Tuesday, ended yesterday with more than 13.35 million shares being traded.

On a year-to-date basis as of yesterday’s price, IWC was up a staggering 282.61%.

The upward trajectory has been mainly due to the euphoria on IWH taking over the listing status of IWC.

The value creation seen by investors was that the listed company would sit on prime Bandar Malaysia land.

Bandar Malaysia is definitely the crown jewel, a 20-year development plan spanning over 483 acres located right in the heart of Kuala Lumpur with a gross development value of some RM200bil.

Because of this, IWC shares were viewed as a long-term proxy for the appreciation of central business district land in Johor Baru and Kuala Lumpur by Credit Suisse recently.

It was also referred to as the world’s best-performing small-cap stock this year, as the property company announced plans to raise as much as RM5bil via convertible bonds, mainly to develop the real estate that it’s acquiring, according to executive vice-chairman Tan Sri Lim Kang Hoo in April.

And that’s for a company that has no analysts covering it and despite it having incurred a net loss of RM15mil in financial year 2016.

In March, it was announced that IWC was the target of a reverse takeover by Lim and his business associates, including the Johor Sultan, where the new-look IWH would have a total of 7,400 acres of land.

This is equivalent to about nine times New York City’s Central Park.

At the point of takeover, the stock was valued at 3.7 times its book value, excluding the land acquisitions via the takeover.