Cancelled: Proposed merger of property developers EcoWorld, UEM Sunrise

 

Eco World Development Group Bhd (EcoWorld) has decided to halt the proposed merger with Khazanah-linked UEM Sunrise Bhd (UEMS).

In a statement today, EcoWorld chairperson Liew Kee Sin said the decision was made following discussions with UEM Sunrise this month and after a careful evaluation by the EcoWorld board.

"Following the commencement of discussions with UEM Sunrise in January 2021 and after careful evaluation of the proposed merger by our board, alongside EcoWorld Malaysia’s own business plans and the current challenging environment with the re-implementation of the movement control order, we have decided not to pursue the proposed merger further with UEMS," Liew said.

"The cessation of talks on the proposed merger will enable EcoWorld to actively pursue other corporate proposals that may be more complementary to our present growth plans and strategies," Liew said in a statement to Bursa Malaysia today.

"It will also enable us to focus on the group's own business plans for the financial year 2021, which includes a sales target of RM2.875 billion for EcoWorld that is 25 percent higher than the actual RM2.3 billion sales recorded in the financial year 2020," he said.

"We certainly remain open to the possibility of future collaborations with UEM Sunrise, should another opportunity arise," he said.

On Oct 5, Khazanah Nasional’s fully-owned unit UEM Group Bhd proposed the merger between UEM Sunrise - where it owns a 66.1 percent stake - and EcoWorld, with the intention of pooling the two companies’ resources and capabilities to strengthen their performance and long-term sustainability.

EcoWorld would become a wholly-owned subsidiary of UEM Sunrise and its shares delisted if the proposed tie-up, via an exchange of shares and warrants for new shares and warrants in UEM Sunrise, goes ahead.

The merger idea was reportedly proposed to create one of the largest property developers in Malaysia, which would have a projected gross development value of RM173.2 billion and a landbank totalling over 6,880 hectares locally.

Amid controversy over the proposed merger, UEM Sunrise Bhd managing director and chief executive Anwar Syahrin Abdul Ajib and its board member Subimal Sen Gupta Sen were announced to have resigned just days after the Oct 5 announcement.

The Securities Commission has given the two parties until Jan 31 to decide whether to proceed with discussions on the proposed merger. - Mkini