Thursday, 22 June 2017

(NST) S P Setia to take over I&P Group for RM3.6b

SHAH ALAM: S P Setia Bhd has signed a conditional share purchase agreement to acquire I&P Group Sdn Bhd for RM3.6 billion.

Upon completion, I&P Group will become a wholly-owned subsidiary of S P Setia, allowing it to expand its land banks from 5,141 acres to 9,417 acres.

On April 14, 2017, the S P Setia entered into a non-binding Memorandum of Intent (MOI) with Permodalan Nasional Berhad (PNB) and Amanahraya Trustees Berhad (as trustee for Amanah Saham Bumiputera) (ATR-ASB) to commence negotiations on the said proposed acquisition.

S P Setia appointed three independent valuers namely Messrs Jones Lang Wootton, Messrs CH Williams Talhar & Wong Sdn Bhd and Messrs Khong & Jaafar Sdn Bhd (valuers) to appraise all the unsold completed properties, land held for property development, on-going property development and investment properties of I&P Group.

It said the aggregated market value of the properties independently appraised stood at about RM7.39 billion. The unaudited net asset value (NAV) of I&P Group as at April 30, 2017 was RM3.23 billion.

S P Setia noted after factoring in this independently appraised market values, the adjusted unaudited NAV of I&P Group is RM6.01 billion. Accordingly, the purchase price of RM3.65 billion is at a discount of approximately 39.3% to the adjusted unaudited NAV of I&P Group.

S P Setia president and chief executive officer Datuk Khor Chap Jen said the synergistic acquisition will further strengthen the company’s brand presence in Malaysia and help paves the way for the creation of greater shareholder value for S P Setia.

“I&P’s land banks are located in Klang Valley and Johor Bahru, and mostly in areas where S P Setia had established a stronghold with its Setia brand. I&P Group will facilitate S P Setia to access wider market segments. Additionally, I&P Group has a strong balance sheet,” he said in a statement.

I&P Group has 4,276 acres of land banks, which include 901 acres in Semenyih, 1,154 acres in Shah Alam and Klang area, and 1,704 acres in Johor Bahru.

Among others, its key flagship ongoing developments include Bandar Kinrara, Alam Impian, Kota Bayuemas and Alam Sari in Klang Valley, and Taman Pelangi Indah, Taman Pelangi and Taman Perling in Johor Baru.

It said the combined undeveloped land banks would total up to 9,417 acres making S P Setia the third largest property developer in Malaysia by the size of land banks.

Meanwhile, S P Setia also announced its fundraising proposal for the proposed acquisition on a renounceable rights issue of new ordinary shares in S P Setia to raise gross proceeds of up to RM1.2 billion.

The company said the fundraising proposal is a renounceable rights issue of a new Class B Islamic redeemable convertible preference shares (RCPS-i B) to raise gross proceeds of up to RM1.2 billion and a private placement of new shares to raise up to RM1.2 billion.

The entitlement basis and the issue price of the rights shares and RCPS-i B will be fixed at a later stage. The profit rate for the RCPS-i B is fixed at 5.93 per cent p.a. and is non-callable for the first five years. It will be convertible to ordinary shares at a conversion ratio to be determined later.

It said both the proposed acquisition and the fundraising proposals are subject to shareholders’ approval.