By KINIBIZ
Property developer Eco World Development Group Berhad is deferring a proposed land transfer from its major shareholder for the second time in three months.
In a regulatory filing yesterday, Eco World announced that the group and its major shareholder Eco World Development Sdn Bhd (EWDSB) had mutually agreed to further extend the acceptance of the latter’s offer to Nov 8, 2014, which is two months from the current deadline of Sept 8, 2014.
EWDSB had offered in May to sell sell properties in Sydney worth AUD$28 million (RM84.7 million) to the group for the same price and same terms EWDSB is buying it for.
This time extension follows the first three-month time extension from the previous deadline of June 8, 2014, which was announced on June 6.
Liew Kee Sin
“Since Liew Kee Sin joined the Board on May 5 2014 as a non-independent non-executive director, the board has been considering several other interesting proposals which are also in line with the Company’s long-term overseas expansion plans,” said Eco World.
“EWDSB has agreed to grant a further extension of time to allow the board (other than the interested directors and other directors) additional time to deliberate on the offer holistically with other potential international opportunities and also to determine the appropriate shareholding and funding structures through which the company may undertake such ventures,” added Eco World.
The group said it would make a detailed announcement on the offer once the board has decided, “having regard to the other opportunities the board is currently evaluating on the international front”.
‘One-off’ deal
Eco World had previously said that the Sydney deal, which circumvents board and shareholder approval, was a one-off thing.
Chang Khim Wah
“The deal needed to be done quickly,” said chief executive officer Chang Khim Wah in June, adding that it was a special case and that “where possible we will use the listed company.”
EWDSB, which currently owns a 30.01% block in Eco World, had inked agreements on May 9, 2014 with the seller of the properties, Menara Parramatta Pty Limited, for the purchase through Eco World Sydney Development Pty Limited, a wholly owned unit of EWDSB’s wholly owned subsidiary Fortune Quest Group Limited.
The agreements signed were a contract of sale of the properties from Menara Parramatta for AUD$28 million; a development deed between EWDSB and Menara Parramatta whereby the latter will gain relevant authority approvals for redevelopment of the land; and a guarantee and indemnity by EWDSB in favour of Menara Parramatta to guarantee the performance by Eco World Sydney of its obligations under the contract of sale and development deed.
According to EWDSB’s offer letter dated May 9 2014, Eco World said the properties are located on a 1.18-acre land parcel in Sydney and had been earmarked for redevelopment into a mixed residential and commercial development.
In a previous statement, Eco World said it is interested in exploring overseas expansion which includes Sydney as a desirable location. However it could not buy the Sydney properties in question directly as such an acquisition would require board approval and potentially shareholders’ approval.
“It is a key term of the contract of sale that the vendor (Menara Parramatta) requires the purchase price to be fully settled by 30 May 2014,” said Eco World. “As such, it is not possible for Eco World to acquire the property directly from the vendor within the time-frame stipulated.”
Having evaluated the land’s development prospects EWDSB feels it has good potential as a strong debut project for a new development name seeking to establish a foothold in Sydney, said Eco World’s statement, adding that with that evaluation EWDSB accordingly inked the agreements and will complete the sale by May 30, 2014.
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