SINGAPORE (Jan 13): Malaysia’s Amcorp Group plans to pay just over $55 million for a controlling stake in local developer TEE Land.
Amcorp, controlled by Tan Sri Azman Hashim, will buy a 63.28% stake in TEE Land from its existing parent company, TEE International. It will also buy over a separate 5.5% stake in TEE Land held directly by TEE International’s controlling shareholder, Phua Chian Kin, popularly known as CK.
At 17.9 cents per share, the selling price represents a premium of 9.1% over TEE Land’s last traded price of 16.9 cents on Jan 9. However, the proposed transaction price is below TEE Land’s net asset value of 31.9 cents as at Nov 30 2019.
According to TEE International, it will be able to book net proceeds of $48.27 million. “The disposal of our stake in TEE Land will help to improve TEE Group’s financial position, free up cash to be used in our core engineering and infrastructure businesses, as well as other complementary businesses,” says Eric Phua Boon Kin, interim group CEO of TEE International.
“We can also make strategic investments or acquisitions that can help us progressively build our recurring revenue streams,” says Eric, the younger brother of CK, who stepped down in September after he was found to have made unauthorised money transfers from the company to entities controlled by himself.
The funds have since been reinstated in full.
PricewaterhouseCoopers Risk Services Pte Ltd has been appointed as an external investigator to look into this matter.
If Amcorp is successful in acquiring the stakes from TEE International and CK, it will make a mandatory general offer at the same price of 17.9 cents to buy over the remaining TEE Land shares from other shareholders. Amcorp plans to keep TEE Land’s listing status.
TEE Land was spun off from TEE International back in 2013. Its IPO price was 54 cents. The intention was so that TEE Land can raise funds separately to fund its own capital-intensive property development activities, while TEE International focuses on its core engineering businesses.
TEE Land wasn’t immune to the July 2018 property cooling measures imposed suddenly by the government. It chose to forfeit the deposit of $600,000 for an existing residential development along Upper East Coast Road, than to go ahead and pay the full sum of $60 million and risk difficulties selling the redevelopment.
That aside, TEE Land has a couple of existing projects in the pipeline, notably, 35 Gilstead. When TEE Land bought the freehold site then occupied by Casa Contendere condominium back in Nov 2017, it was the company’s largest ever property project.