KUALA LUMUR: The initial public offering of Malaysian real estate developer Eco World International will be delayed by at least two months.
Its Chief Executive Teow Leong Seng said the proposed IPO, that could potentially raise about US$500 million in the local market, would now be in September or October instead by mid-2016 as planned.
A report in the Nikkei Asian Review said Eco World International’s IPO, expected to be Malaysia’s largest initial public offering in more than a year, hoped to sell up to 2.15 billion new shares and issue up to 960 million free warrants.
The delay, Teow was quoted as saying, was to facilitate the entry of an undisclosed strategic investor to co-anchor the IPO. The company was also in talks with other investors to participate in the IPO, he added.
“The slight delay is due to updates required to the draft prospectus following completion of negotiations with the strategic investor and the process of seeking shareholders’ approval, among others,” Teow said. “We are unable to comment further until completion of negotiations.”
The IPO listing delay by Eco World International, which mainly develops properties in the United Kingdom and Australia, follows Britain’s vote to leave the European Union.
“Now that the sterling has dropped, it means that the cost we have to inject into the UK to pay for the development of our three projects there will be lower,” its Vice-Chairman Liew Kee Sin said in a statement. “If this situation holds, it will also make it cheaper for EWI to acquire new sites post-listing.”
Eco World International, currently fully-owned by Malaysia-listed Eco World Development Group, has three projects in London that have fetched the company 581.1 million pound sterling in sales as of April.
“A weaker sterling will in fact help Malaysian, Singaporean, China and Hong Kong customers by bringing down their cost of investment,” said Liew. Further, “customers from these countries buy London properties for reasons, which have nothing to do with whether the UK is a part of the EU.”
Eco World International expects to handover London City Island property to clients in 2018, Embassy Gardens in 2019 and Wardian London in 2020, the Nikkei Asian Review report said.
Shares of Eco World rose 0.8 per cent to RM1.27 yesterday.