Aseana mulling demerger
Aseana Properties says that it is considering proposals to demerge certain assets held by the company in exchange for the buyback and cancellation of a significant percentage of its shares.
The transaction would involve buying back shares owned by Ireka Corporation Berhad and its concert party Legacy Essence Limited along with certain other shareholders who together own about half the company.
In exchange for their shares, these shareholders would receive an in specie (in other words assets other than cash) distribution. They would pay some cash to the company to reflect the relative value of the assets to be distributed and the value of their shareholdings as at the date of the buyback.
The company will assess the net book value of the assets as at 31 December 2019 and has agreed with Ireka that adjustments should be made, where appropriate, to reflect the settlement of potential claims that Aseana Properties may have against Ireka or its group companies in connection with the company’s projects, including the settlement of amounts owing by a subsidiary of Ireka to the company relating to the construction of The RuMa Hotel and Residences in Kuala Lumpur (“RuMa”).
It is presently contemplated that the assets that will be distributed in specie will comprise RuMa, a portion of the land owned by the company in Kota Kinabalu and the residual projects from past developments. Any shares bought back would be cancelled. Following the transaction there would be a complete separation of interests of Ireka and Legacy Essence from the company.
The directors want to hear the views of other shareholders. The transaction would require the passing of a special resolution, which will require the approval of 66 2/3% of those voting at an EGM, which it is expected would be held in June 2020. Approvals would also be needed from other parties including shareholders in Ireka and the company’s bankers and holders of Medium Term Notes issued in relation to the financing of RuMa.