Thursday, March 20, 2014

EcoWorld's land purchase

EcoWorld has just announced a land purchase at RM35 per sq foot from Tropicana. That piece of land is adjacent to Bandar Rimbayu, now a IJM project with Keuro owning effectively 28% of that piece. The piece that is owned through Rimbayu is around 1,870 acres and that translate to 43,560 x 1,870 = 81,457,200 sq ft. Assuming we are taking at RM35 per sq ft as what EcoWorld is paying, the piece is worth around RM2.851 billion. This means Keuro's stake on the land alone is worth around RM798 million.

The Rimbayu's piece has a huge lake which although is a discount, will still be worth something. Buyers like houses overlooking a nice lake, which Rimbayu has.

Now you know why I was pissed off...

Note:
Keuro's effective stake in Bandar Rimbayu Sdn Bhd which is derived from 2013 Annual Report.


Another which shows that the effective ownership of Rimbayu (formerly known as Canal City Construction) is 28% and used to be 35% (Between financial year 2012 and 2013, there was no shareholding change for Rimbayu) is as below:

From Annual Report 2012, the one provided under Annual Report 2013 is probably wrong

14 comments:

Malaysia Stock Talk said...

After disposal of 10%, KEURO still has 40% stake in Radiant Pillar which develops Rimbayu.

Mind to explain why 28% was used in the calculation instead of 40%?

Thanks

felicity said...

28% is because the controlling company only has 70%. Hence 40% x 70% effectively gives Keuro 28%.

Art Featherpitch said...

According to their latest circular on the proposed disposal, page 107(appendix IV), note 8, it does say effective equity interest in Bandar Rimbayu Sdn Bhd is 100% by Radiant Pillar(RPSB). Also, there isn't any minority interest under the audited RPSB balance sheet. However the FY13 Keuro annual report shows 35% effective equity interest though(based on 50% holding in RPSB).

Could you please quote any source on the 70%?

panaceaasia said...

Why didn't IJM acquire the 20% stake recently transacted rather than allow MWE to buy that stake if K Euro is grossly undervalued?

Malaysia Stock Talk said...

Refer to page 2 of 2013 Annual Report, Keuro has 50% effective stake in Radiant Pillar

Keuro>100% KEB Plantations Holdings SB>100% KEB Builders SB>40% Radiant Pillar SB

Keuro>100% KEB Management SB>10% Radiant Pillar SB

So post 10% disposal, Keuro should still own 40% effective stake in Radiant Pillar

felicity said...

I remember I did an extensive research on this. Yes the effective 35% has been in the books of Kumpulan Euro on this.

I am attaching the snapshot of its 35%.

felicity said...

If I am not mistaken, Keuro used a 70% shareholding subsidiary to hold Radiant Pillar, which effectively allows it to hold 35% of bandar Rimbayu. As for IJM Land, it holds the other 50% of through its wholly owned subsidiary.

But that has to be checked. I did trace back the transactions between IJM and Keuro back to its early days, if can remember 2006 or 2007.

felicity said...

Hi Panaceaasia

I do not think this is as straightforward a deal...

GL said...

Hi Felicity do you think ijm/ijm land will continue to gobble up keuro's assets at low valuation...?

Malaysia Stock Talk said...

Looking at paragraph 2.1, page 2 of the circular dated 5 Dec.

"RPSB an investment holding company, is a 50:50 JV company of our company and IJML, through their wholly-owned subsidiaries, Bandar Rimbayu Sdn Bhd, the wholly-owned subsidiary of RPSB is primarily engaged in property development.

felicity said...

I can't really answer on what Ijm will do in future

Greg James said...
This comment has been removed by a blog administrator.
Art Featherpitch said...

Hi panaceaasia

If IJM acquries the 20% block instead of MWE, IJM's total shareholding interest in Keuro will increase to approx. 45%(crossing 33% threshold) and will be required to extend a MGO on all shares of Keuro.

Malaysia Stock Talk said...

With the release of the latest KEURO annual report, it is now clear that KEURO holds 40% stake in Rimbayu.

A "bonus" to KEURO shareholders who thought KEURO's stake in Rimbayu was 28%