By Chan Quan Min
Bursa Malaysia listed Eco World Development Group Bhd today said the purchase of a A$28 million (RM84.7 million) parcel of land in a satellite town of Sydney circumventing board and shareholder approval was a special case.
CEO Chang Khim Wah said this while announcing ambitious plans for the property developer at Invest Malaysia. Eco World has chalked up sales of RM1.1 billion up to March after the launch of three major developments, EcoMajestic, EcoSpring and EcoSummer.
As a result, the developer is well on the way to achieving its target of RM2 billion in sales this year, Chang said. When asked if he would consider upping his target given the good take-up rates of 95% for EcoMajestic and 85% for EcoSpring and EcoSummer combined, Chang remarked, “RM2 billion is okay.”
“It’s a good start for a new setup,” he added. Chang was with SP Setia for about two decades before he was roped in to head Eco World, which only took its current form after a flurry of corporate manoeuvres late last year, including a reverse takeover listing on Bursa Malaysia.
Last month a privately-held Eco World shareholder Eco World Development Sdn Bhd brokered a deal where a A$28 million plot of land in Parramatta, a satellite town of Sydney, would be first purchased by the company before being sold on for the same price and terms to Bursa-listed Eco World.
Chang explained today that the Sydney land deal was done in a way that circumvented board and shareholder approval because “the deal needed to be done quickly” on the seller’s urging.
He added that the Sydney land deal was a “special case” and “where possible we will use the listed company.”
A note to the stock exchange last month explaining the deal said it was “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. As such, it is not possible for Eco World to acquire the property directly from the vendor within the time-frame stipulated.”
Expansion and capital raising exercises
Eco World targets higher sales of RM3 billion for 2015, 50% higher than this year’s target, as more projects are launched. Chang said the company was “scouting around” for opportunities but will keep its focus in Malaysia’s urban centres.
To live up to its “Eco” brand name, Chang said the company has obtained green building certification for two of its developments. He said the company has an environmentally-friendly philosophy that includes, among others, tree planting to offset carbon emissions and the use of recycled and recyclable materials.
He dismissed talk that Eco World, with its hurried pace of land acquisition in the past year, was over-stretching itself.
Chang and chief financial officer Heah Kok Boon explained to reporters that the corporate exercises announced in April comprising a rights issue worth RM700 million and private placement of 20% of its shares worth RM600 million should generate a cash surplus for the company.
This was in addition to an asset injection exercise, also announced in April, of an estimated RM30 billion in gross development value (GDV) by its shareholders.
KiniBiz investigated Eco World’s sudden and mysterious emergence as a major property player in an incisive feature last month: Who really controls Eco World?
You must be logged in to post a comment.