IOI Property is a RM15bil property giant in the making, slated for relisting in Sept

[You must be registered and logged in to see this image.] To
reward IOI Corp shareholders, not less than half of the RM15bil will be
given back to shareholders in the form of a dividend-in-specie. Based
on IOI Corp’s 6.4 billion shares, this works out to more than RM1.20
per share. PETALING JAYA: IOI Properties Bhd, which is set to demerge from parent IOI Corp Bhd,
will seek relisting on the main market of Bursa Malaysia to become one
of the biggest listed property companies in the country with total
assets of RM15bil, sources said.
To be listed in September, the asset size of IOI Properties would be worth more than RM12bil even after deducting liabilities, said a source.
To
reward IOI Corp shareholders, not less than half of the RM15bil will be
given back to shareholders in the form of a dividend-in-specie. Based
on IOI Corp's 6.4 billion shares, this works out to more than RM1.20
per share.
IOI Corp shareholders will be getting more than 50%
of their IOI Properties shares for free. This is because a property
company typically trades at a discount to its book value, and hence,
the market value of IOI Properties will be at a discount to the asset
size of RM15bil.
The demerger exercise will also entail a
renounceable rights issue, where existing shareholders who subscribe to
the rights exercise will not be diluted.
The source added that
IOI Properties' gross development value would be equally divided
between its property businesses in Malaysia and its overseas
operations, which consist of Singapore and Xiamen, China.
IOI Properties was privatised in 2009 by IOI Corp at a price of RM2.60 per share, or RM1.3bil.
Tan Sri Lee Shin Cheng,
the executive chairman and founder of IOI Corp, is the single largest
shareholder of the company, with a 44.8% stake as of yesterday. He has
been accumulating IOI Corp shares over the last six months. IOI Corp
closed up two sen to RM5.12 on a volume of 4.52 million shares.
“Once
listed, IOI Properties would likely be the biggest property company in
terms of absolute profitability. More importantly, it would be one of
the very few international property plays in Malaysia,” said one source.
As of financial year ended June 30, 2012, IOI Properties recorded an operating profit of RM506.3mil.
The
source added that IOI Properties was anticipating a huge spike in its
earnings for the next three financial years, as profit contributions
from Singapore and Xiamen start streaming in after July 2013.
As
of 2012, IOI Properties had a book value of RM7.9bil. For the listing
exercise, its book value will be boosted by the revaluation of five
mature plantation estates, located mainly in Ayer Keroh in Malacca,
Bahau in Negri Sembilan and Kulai in Johor.
IOI Properties has vast tracts of landbank, which were bought cheap and are yet to be revalued.
For
instance, the Kulai Estate still has some 1,416.39ha that are yet to be
developed, while the Bahau and Ayer Keroh estates have some 404.68ha
for development each.
The source revealed that IOI Properties planned to make Kulai the next bustling “Puchong township”.
IOI
Properties had been recognised for many successful township
developments, particularly, the thriving Puchong residential and
commercial township.
Apart from the IOI Puchong Mall, the IOI
City Mall in Putrajaya will be one of Malaysia's largest malls with a
lettable area of 1.4 million sq ft once it is completed by end-2014.
The
source said that since IOI Properties ventured into Singapore and China
in 2011 and 2012, the company was no longer just a township developer,
but was also steadily rebranding its image towards becoming a high-end
condominium and commercial developer.
The company engaged Norman Foster as the architect for its South Beach development in Singapore.
IOI Corp has hired AmInvestment Bank Bhd and OSK Bank Bhd as the advisers for the demerger exercise.