EKOVEST (8877): EKOVEST BHD commits RM2.7bil investment to participate in Bandar Malaysia project
KUALA LUMPUR: Ekovest Bhd said today it will pay RM250mil as initial investment outlay to participate in the development of Bandar Malaysia through a joint venture with Iskandar Waterfront Holdings Sdn Bhd (IWH).
Ekovest's chairman Tan Sri Lim Kang Hoo owns a 63% stake in IWH.
Ekovest, in a filing with Bursa Malaysia today, said the estimated total investment commitment for the proposed participation and investment in the Bandar Malaysia project is approximately RM1.48bil.
Subsequently, Ekovest will be required to commit an additional sum of approximately RM1.23bil over a period of time until year 2023.
"Ekovest’s participation and investment in the Bandar Malaysia Project will provide Ekovest an opportunity to generate additional contracts arising from the infrastructure and development of Bandar Malaysia Project which has an estimated gross development value of approximately RM140bil," it said.
Ekovest today entered into a heads of agreement with IWH to set up a joint venture company that will facilitate its participation in the Bandar Malaysia project.
The company had first announced the plan to invest and participate in the development of Bandar Malaysia on Sept 8.
"Synergies are expected to arise from the joint venture between IWH and Ekovest," the company said today.
IWH is principally involved in the planning, development and implementation of large-scale flagship integrated urban developments in Malaysia.
Ekovest, on the other hand, has the track record, skills and technical know-how to undertake large-scale infrastructure developments and construction.
"As such, the core strength of IWH and Ekovest complements each other as IWH will focus on the planning and implementation of Bandar Malaysia Project while Ekovest will focus on the infrastructure and constructions work component, in conjunction with another strategic partner, CRECM, for the Bandar Malaysia Project," it said.
IWH and China Railway Engineering Corporation (M) Sdn Bhd (CRECM) each has a 50% stake in IWH-CREC Sdn Bhd.
IWH-CREC had inked a restated and amended share sale agreement with government-owned TRX City Sdn Bhd in December last year to buy the 60% equity interest in Bandar Malaysia Sdn Bhd — Bandar Malaysia's master developer — for RM7.41bil.
BMSB is presently undertaking the overall master planning and development of the 16 parcels of land located in Sungai Besi, Kuala Lumpur for the Bandar Malaysia Project.
To date, IWH-CREC has made a total payment of RM1.241bil to TRX City for the deposit and advance payment, which IWH’s 50% contribution is RM620.5mil.