06 May 2014

Felda Investment buys 49.45% stake in Encorp in RM239.72mil deals

  06 May 2014
PETALING JAYA: Felda Investment Corp (FIC), the investment arm of the Federal Land Development Authority (Felda), has bought out all the shares in Encorp Bhd held by two major shareholders for RM239.72mil.
The move, said observers, could make Encorp the listed property development vehicle of the Felda group, which owns large swathes of valuable landbank in major cities across Malaysia.
According to a Bursa Malaysia filing yesterday, FIC had acquired 49.45% of Encorp from Lavista Sdn Bhd and Pegang Impian Holdings Sdn Bhd via separate conditional sale and purchase agreements.
This will oblige FIC to extend a mandatory takeover offer for the shares, warrants and loan stocks that it does not own in Encorp at RM1.55, 55 sen and RM1.55 apiece, respectively.
Lavista is to dispose of its 29.85% stake, as well as 8.33 million five-year warrants and 16.66 million five-year 6% redeemable convertible secured loan stocks (RCSLS) with a nominal value of RM1 each to FIC for RM133.69mil cash.
Pegang Impian, meanwhile, will sell its entire 19.6% interest in Encorp shares, 10.47 million warrants and 20.94 million RCSLS for RM106mil.
Trading in the stock was suspended yesterday and will be requoted today.
Encorp was last transacted on Monday at RM1.53, off its 52-week high of RM1.62 but near its best level since 2008, with 955,400 shares changing hands.
At this price, the counter’s market capitalisation stood at RM341.8mil.
The warrants and loan stocks had closed at 75.5 sen and RM1.52, respectively, on Monday.
It is understood that Encorp group chief executive officer Yeoh Soo Ann, who had engineered a management buyout of the company last July with chief operating officer Mohd Ibrahim Masru-kin, will leave Encorp following FIC’s takeover.
Mohd Ibrahim, however, was expected to stay on, sources told StarBiz.
Yeoh and Mohd Ibrahim control Encorp through Lavista, which they had acquired from long-time Encorp shareholder and executive chairman Datuk Seri Effendi Norwawi.
Yeoh, market watchers said, could join an unlisted company with his former associates.
“The proposed acquisitions are in line with FIC’s strategy to build its capabilities in property development and acquire investment properties,” FIC noted in its stock exchange filing.
“In the longer term, this is expected to serve as a platform for FIC to successfully undertake the development of Felda’s landbank, including those in prime areas in the Klang Valley and other urban centres in Malaysia.”
It had been previously reported that FIC was eyeing a substantial stake in Encorp.
FIC has been tasked to monetise Felda’s existing assets, which include 22 acres of prime land in Kuala Lumpur and hotels.
It is seeking to expand Felda’s hotel ventures under the Felda Residence brand name.
Besides Lavista and Pegang Impian, Norwegian fund Norges also holds a 2.71% interest in Encorp, according to Bloomberg data.
Pegang Impian, Encorp’s annual report showed, is owned by Abang Ariffin Abang Bohan and Taufiq Abdul Khalid.
They are not linked to Effendi, but checks online revealed that both Abang Ariffin and Taufiq were partners in the same law firm, Ariffin Shahzad Advocates & Solicitors.
Abang Ariffin had also served on the board of GW Plastics Holdings Bhd with Yeoh.
Encorp, a mid-cap construction and property player, officially opened its first retail development, Encorp Strand Mall (pic), last weekend.
The mall, which has 435,000 sq ft of net lettable area, is a joint venture between the Selangor State Development Corp or PKNS and Encorp on an 18.6ha leasehold parcel in the thriving commercial hub of Kota Damansara in Selangor.
The mall is part of the RM1.4bil Encorp Strand, a mixed development consisting of 265 business suites, 14 blocks of self-contained garden offices, 278 serviced residences and 2,500 parking bays.
Other developments on Encorp’s plate include Encorp Marina Puteri Harbour in Iskandar Malaysia, Encorp Cahaya Alam in Shah Alam, the Enclave Hillside Villas in Batu Feringghi, Penang, and Residences on McCallum Lane in Perth, Australia.
By THE STAR
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