PUTRAJAYA (May 15, 2013): IOI Corp Bhd's soon-to-be-relisted property company is expected to generate RM1 billion in operating profit in the next three years, said its executive chairman Tan Sri Lee Shin Cheng.
The property unit currently generates about RM506.3 million in operating profit.
Lee said the property entity expects to see some RM2 billion in annual sales in the next three years.
Under a string of proposals announced yesterday, IOI Corp will inject IOI Properties Bhd, its subsidiaries in property investment and other property-related businesses as well as two parcels of agricultural land measuring 500 acres and 1,279 acres in Bahau and Segamat respectively into a newco called IOI Properties Group Bhd, which is expected to be listed on the Main Market of Bursa Malaysia by the end of this year.
Instead of cash, IOI Corp will get 3.24 billion shares in the new entity.
Up to to 2.162 billion or a 66% stake in the company will be re-distributed to IOI Corp's shareholders on the basis of one new company share for every three shares held in IOI Corp.
Another 33% or 1.081 billion of shares held by IOI Corp will then be offered to shareholders through a proposed non-renounceable restricted offer for sale (ROS) at up to 30% discount on the basis of one ListCo share for every six IOI Corp Shares, of the listing reference price. Lee will take up the ROS not subscribed by shareholders.
Meanwhile, the enlarged IOI Properties Group will have 10,000 acres of landbank with gross development value of RM16 billion spread across Malaysia, Singapore and China. Of this total, about 90% is located domestically.
IOI Properties Group will also purchase 10% stakes in Property Village Bhd and Property Skyline Sdn Bhd from Summervest Sdn Bhd, a private company controlled by Lee. This purchase is valued at RM196.345 million to be satisfied via an issuance of up to 43.997 million shares in the new property company.
Both the transactions value the new property company shares at RM4.46 a piece.
The whole exercise will see the property firm listed at more than 10 times the size it was when it was taken private by IOI Corp some three years ago. IOI Properties was valued at RM1.3 billion when it was taken private in 2009.
The property company that IOI Corp is looking to list now, will have a real net asset value (RNAV) of RM14.5 billion at the demerger stage.
"It is very different this time around. At that point (in 2009) IOI Corp was doing so well, we had forgotten about our property business. After privatisation, we managed to grow our landbank in very strategic locations and now we want to share our success with our shareholders.
"The 30% discount we are giving shareholders for our ROS will benefit shareholders," Lee told analysts and media in a briefing yesterday.
IOI Corp expects to list up to 3.287 billion shares in IOI Properties Group on Bursa Malaysia. IOI Corp will cease to be a shareholder in the new property company post-listing.
IOI Properties Group is expected to have two CEOs who will be named at a later date, said Lee, who is expected to stay on as chairman.
