KUALA LUMPUR: Sime Darby Bhd will retain its remaining 22% stake in niche property developer Eastern & Oriental Bhd (E&O) after selling a 9.9% stake toMorning Crest Sdn Bhd, a company substantially held by Datuk Terry Tham Ka Hon.
Sime Darby group chief financial officer Tong Poh Keow said this meant Sime Darby would be E&O’s largest shareholder.
“Sime will have an estimated gain of RM56mil from the disposal of 110 million shares for RM319mil, or RM2.90 per share.
“This gain will only be recognised after full payment has been made with its first 10% payable on signing the sale and purchase agreement,” she told reporters at Sime Darby’s announcement of its third quarter financial year 2013/2014 results here.
Tham, who is also E&O managing director, was among three parties who collectively sold a 30% equity interest in E&O to Sime Darby for RM766mil between 2011 and 2013. Tham sold a 12.2% stake then. The other two parties were Tan Sri Wan Azmi Wan Hamzah and Singapore-based GK Goh Holdings Ltd.
Tong said the group bought the stake earlier because E&O was a niche developer operating in areas where Sime would like to have a foothold, namely Penang andIskandar Malaysia in Johor.
She said while “that strategy has not changed”, the group considered this “as a strategic disposal”.
Tong said E&O, which is known for its Seri Tanjung Pinang development in Penang, had now arrived at a “critical” stage of its development which involved land reclamation.
E&O is in the final stages of getting the necessary approvals for Seri Tanjung Pinang phase two after receiving the Federal Department of Environment’s conditional approval last month.
The next step would be to apply to the Penang state government to endorse phase two of its master plan. It hopes to get state approval by the fourth quarter of this year.
Tong said there was “clear communication” from the E&O management team and “this was how we evaluated this decision.” - The Star
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