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News Room


24 Jun 2013


Tambun Indah tightens grip on Pearl City

The Sun Daily

PETALING JAYA (June 24, 2013): Tambun Indah Land Bhd, best known for developing its flagship Pearl City township in Seberang Perai, Penang, plans to capture a bigger pie of the expanding profits coming from the development, which has a remaining gross development value (GDV) of RM1.9 billion.

It is proposing to acquire stakes in two subsidiaries that currently undertake the township development of Pearl City.

In a statement on Friday, Tambun Indah said it plans to acquire the remaining 30% stake in Tambun Indah Development Sdn Bhd (TIDSB), comprising 300,000 shares and 8.04 million redeemable preference shares, and a 40% stake in Palmington Sdn Bhd, consisting 2.3 million shares, from Pembangunan Bandar Mutiara Sdn Bhd for a combined RM112.2 million.

Pembangunan Bandar Mutiara is a wholly-owned subsidiary of Nadayu Properties Bhd.
For the financial year ended Dec 31, 2012 (FY12), the two subsidiaries – TIDSB and Palmington contributed about 70% or RM39.8 million to the group’s net profit of RM57 million, out of which profit attributable to Nadayu was RM14 million.

“The acquisition is a strategic move for the group not only to gain a complete exposure of the fast growing township near the Penang Second Bridge, but also to capture a bigger pie of the expanding profits coming from the Pearl City development," said Tambun Indah managing director Teh Kiak Seng.

Currently, TIDSB and Palmington have a total 660.9 acres of land in Pearl City slated for a GDV of RM2.7 billion. Ongoing projects stand at a GDV of RM841.3 million while future developments with a GDV of RM1.9 billion will be carried out over six to seven years.

Tambun Indah said the acquisition will be funded via a combination of RM40.7 million cash and an issuance of 55 million new Tambun Indah shares to Nadayu at an issue price of RM1.30 per share.

This will result in will Nadayu becoming a 14.2% substantial shareholder of Tambun Indah, the second largest after Teh’s shareholding of 150.1 million shares.

"The cash payment will be funded by internal funds and bank borrowings, as well as partly from the proposed private placement of 15 million new shares, representing up to 4.71% of the issued capital of Tambun Indah, to identified institutional investors," it added.

Teh said the corporate exercises of acquisition and private placement will result in Tambun Indah enlarging its share capital by 70 million shares of 50 sen par, from the current share capital of 318.6 million shares to 388.6 million shares.

The proposed acquisitions are expected to be completed in the fourth quarter of 2013 and is subject to approval from relevant authorities, as well as shareholders in an EGM at a later date.

“The acquisition is a strategic move for the group not only to gain a complete exposure of the fast growing township near the Penang Second Bridge, but also to capture a bigger pie of the expanding profits coming from the Pearl City development,” said Teh.

Upon completion of the exercises, TIDSB and Palmington will become wholly-owned subsidiaries of Tambun Indah.