KUALA LUMPUR (Sept 27): Tycoon Tan Sri Lim Kang Hoo wants to group the various but similar business segments of his stable of companies under an enlarged Ekovest Bhd to streamline and rationalise the businesses and assets, consolidate his direct shareholding in the companies and avoid potential conflict of interests.

Lim, who is a major shareholder of Ekovest Bhd, Knusford Bhd, Iskandar Waterfront Holdings Sdn Bhd (IWH) and Iskandar Waterfront City Bhd (IWCity), said he has proposed to undertake a reorganisation, rationalisation and merger proposal involving these companies, for the consideration of the boards of directors.

Ekovest also owns approximately 62% in PLS Plantation Bhd.

The public listed companies said they had received a letter from Lim dated Sept 27, which was written in his personal capacity as a major shareholder of the companies, for the boards' consideration.

In his letter, Lim said the main proposal is intended to streamline, reorganise, rationalise and merge the businesses and assets currently owned and controlled by himself and persons acting in concert, through the various public listed and non-listed companies, as well as to consolidate his direct shareholdings in the various companies.

Furthermore, the proposals are aimed to mitigate any potential conflict of interests and speculations relating to the alignment of interest of Lim as a major shareholder of the companies. It will also eliminate many of the existing recurrent related party transactions and transfer pricing concerns among the companies moving forward.  

Lim outlined four proposals to achieve the objectives, including a proposed merger of the construction businesses of Ekovest and Knusford, whereby Knusford acquires the entire issued share capital of Ekovest Construction Sdn Bhd — a wholly-owned subsidiary of Ekovest — to be satisfied via the issuance of new ordinary shares in Knusford at the proposed issue price of 60 sen per new Knusford share.

The second proposal involves the proposed acquisition by Ekovest of three parcels of land with approximately 17 acres located in Johor Bahru, which are intended for potential two transit-oriented development (TOD) along the alignment for the Johor Bahru–Singapore Rapid Transit System Link.

The purchase consideration payable by Ekovest to the vendors of TOD 2 and TOD 3 is proposed to be satisfied via the combination of cash and the issuance of new ordinary shares in Ekovest at the proposed issue price of 60 sen per new Ekovest shares, Lim said.

The third proposal involves the acquisition by Ekovest of at least 51% or more of the issued share capital of Credence Resources Sdn Bhd (Credence), which presently holds 63.13% equity interest in IWH, which in turn holds 34.29% equity interest in IWCity.

The vendors of Credence are to be paid via the issuance of new ordinary shares in Ekovest at the proposed issue price of 60 sen per new Ekovest shares.

The fourth proposal is the proposed merger of the properties and assets of IWH and IWCity under a single entity through the acquisition by IWCity of the entire issued share capital of all the existing direct subsidiaries of IWH.

“The purchase consideration payable by IWCity to IWH is proposed to be satisfied via the issuance of new ordinary shares in IWCity to IWH at proposed issue price of 80 sen per new IWCity shares,” Lim said.

Lim said that given the similar core businesses of the companies, the proposals are aimed to consolidate the assets, resources, and capabilities of the respective parties through Ekovest, in order to strengthen the performance, competitiveness and sustainability of the enlarged conglomerate.

“These various corporate proposals are not intended to be conditional or inter-conditional upon each other, and will be implemented separately and independently, if deemed fit by the board of directors of the respective companies,” he said.

Shares in Ekovest closed 1.5 sen or 2.61% lower to 56 sen, giving it a market capitalisation of RM1.66 billion, while Knusford ended one sen or 1.42% higher to 71.5 sen, for a market capitalisation of RM71.25 million.

Shares in IWCity finished one sen or 1.30% lower to 76 sen, valuing the company at RM700.06 million while shares in PLS Plantation ended unchanged at 90 sen, giving it a market capitalisation of RM393.46 million.