The EPF, in its clarification issued on Wednesday, also said "the EPF will continue to hold an approximately 40% economic stake in the same assets".
It said the 40% stake in Nusa Gapurna was held through a co-investment in the properties undertaken in 2011.
It added the advantage from the corporate exercise and assets injection would provide it with the advantage of "having liquid shares as opposed to an illiquid investment in shares of a private company".
Below is the statement issued by the EPF:
The Employees Provident Fund (EPF) would like to make a clarification regarding its stand on the deal between Malaysian Resources Corp Berhad (MRCB) and Nusa Gapurna Development Sdn Bhd. The EPF holds 40% in Nusa Gapurna, through a co-investment in the properties that was undertaken in 2011. By injecting the assets into MRCB, the EPF will continue to hold an approximately 40% economic stake in the same assets but with the advantage of having liquid shares as opposed to an illiquid investment in shares of a private company.
With the departure of Datuk Mohamed Razeek Md Hussain from his position as MRCB chief executive officer, the Board of Directors of MRCB had decided that MRCB would best expand with an entrepreneurial manager at the helm.
Accordingly, discussions were held with the Gapurna group, who are one of the largest privately held developers, and a party that was already familiar to the MRCB Board from their partnership on the Shell HQ development.
Negotiations took a period of several months to be concluded as the EPF and the MRCB Board wanted to ensure that all the advisors and valuers had sufficient time to assess the assets and businesses that were to be acquired.
Commercial discussions also took longer than expected as the independent board members of MRCB wanted a fair price for the issuance of the new MRCB shares and warrants, which is reflected in the proposed issuance price of RM1.55 per share and RM2.30 warrant strike price, which are substantial premiums to market and better reflect the intrinsic value of MRCB.
With regard to the EPF, it benefits by having a strategic entrepreneur partner to drive MRCB's property and construction business.
The model is similar to that of SP Setia or Mah Sing, where an entrepreneur holds a significant stake and works on behalf of all the institutional and minority shareholders.
The EPF plans for the long term and believes that this partnership between MRCB and Gapurna will be an excellent combination of MRCB's expertise in urban regeneration and Gapurna's entrepreneurial drive.
The ultimate combination for the EPF is economically neutral as it had a 40 per cent stake in both businesses and will continue to have approximately the same stake in the combined entity going forward. Hence, it will abstain from the extraordinary general meeting and leave it to the other shareholders to decide on the deal.
Nik Affendi Jaafar General Manager Public Relations Employees Provident Fund
http://biz.thestar.com.my/news/story.asp?file=/2013/2/20/business/20130220193302&sec=business
New chief: Gapurna’s Datuk Mohamad Salim has been tasked to helm MRCB, which has been without a chief executive since July last year.
http://biz.thestar.com.my/news/story.asp?file=/2013/2/20/business/20130220193302&sec=business
EPF justifies Gapurna-MRCB deal
New chief: Gapurna’s Datuk Mohamad Salim has been tasked to helm MRCB, which has been without a chief executive since July last year.
PETALING JAYA: In a rare comment on a deal involving one of its investee companies, the Employees Provident Fund (EPF) issued a one-page statement justifying the entry of Nusa Gapurna Development Sdn Bhd into Malaysian Resources Corp Berhap (MRCB).
Titled “EPF clarifies on MRCB-Gapurna deal”, the provident fund said that it benefitted MRCB, and by extension the EPF, by having a “strategic entrepreneur” to drive MRCB’s property and construction businesses.
“The model is similar to that of SP Setia Bhd or Mah Sing Group Bhd, where an entrepreneur holds a significant stake and works on behalf of all the institutional and minority shareholders.
“The EPF plans for the long term and believes that this partnership between MRCB and Gapurna will be an excellent combination of MRCB’s expertise in urban regeneration and Gapurna’s entrepreneurial drive,” it said. MRCB announced recently that it had teamed up with Gapurna in a RM729mil corporate exercise which will see Gapurna, a private developer injecting land worth RM459mil into MRCB, in return for shares.
The EPF holds 40% in Nusa Gapurna, through a co-investment in properties that was undertaken in 2011. EPF also has a 40% stake in MRCB. EPF also said that with the departure of Datuk Mohamed Razeek Md Hussain from his position as MRCB chief executive officer, the board of directors of MRCB had decided that MRCB would best expand with an entrepreneurial manager at the helm.
Datuk Mohamad Salim Fateh Din, the low-key businessman behind the private property company Gapurna Group, has been tasked to helm MRCB which has been without a chief executive since July last year.
On negotiations of the deal, EPF said it took several months to be concluded as the EPF and the MRCB board wanted to ensure that all the advisors and valuers had sufficient time to assess the assets and businesses that were to be acquired.
Commercial discussions took longer than expected as the independent board members of MRCB wanted a fair price for the issuance of the new MRCB shares and warrants, which is reflected in the proposed issuance price of RM1.55 per share and RM2.30 warrant strike price, which are substantial premiums to market and better reflect the intrinsic value of MRCB, it noted.
The EPF also said by injecting the land assets into MRCB, EPF will continue to hold an approximately 40% economic stake in the same assets but with the advantage of having liquid shares as opposed to an illiquid investment in shares of a private company. The ultimate combination for the EPF is economically neutral as it has a 40% stake in both businesses and will continue to have approximately the same stake in the combined entity going forward.
Hence, it will abstain from the extraordinary general meeting and leave it to the other shareholders to decide on the deal.
No comments:
Post a Comment