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Desmond Lim and Qatar Investment Authority pump in RM684 mil to help develop Pavilion Bukit Jalil Mall

Justin Lim

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theedgemarkets.com


May 29, 2019 07:00 am +08

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KUALA LUMPUR (May 29): Malton Bhd is disposing a 49% stake in Pavilion Bukit Jalil Mall, which is currently under construction, to raise money to complete the massive development in the southern part of Kuala Lumpur.

Under the fund-raising exercise, Malton’s controlling shareholder Tan Sri Desmond Lim Siew Choon and Qatar Investment Authority will inject fresh capital of RM277.25 million and RM406.7 million respectively through subscription of redeemable preference shares (RPS) in Regal Path Sdn Bhd, which will acquire a 49% stake in Pavilion Bukit Jalil Mall from Malton.

In a late announcement to Bursa Malaysia yesterday, Malton said it had entered into a share sale agreement with Regal Path to sell its 49% stake for RM1.48 billion cash.

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Subsequently, Malton’s wholly-owned unit Khuan Choo Realty Sdn Bhd and Jelang Tegas, a company controlled by Lim, will both subscribe to new ordinary shares in Amberstraits. Khuan Choo will own a 51% stake and Lim’s Jelang Tegas a 49% stake in Amberstraits that wholly owns Regal Path.

To raise RM830 million to fund the development costs, Regal Path will then issue RPS to Malton’s Khuan Choo, Lim and QIA’s wholly-owned unit QPBJ Sdn Bhd.

QPBJ will subscribe to RM406.7 million worth of RPS. On top of that, Regal Path will issue RCP-B to Khuan Choo Realty Sdn Bhd (RM215.8 million) and Jelang Tegas Sdn Bhd (RM207.5 million) in proportion to their respective equity shareholdings in Amberstraits.

Furthermore, Regal Path will issue RPS-C to QPBJ for RM14,000 and RPS-D to Khuan Choo for about RM72.6 million, plus RPS-D to Jelang Tugas for RM69.75 million.

Malton said the proposed disposal will allow the group to immediately unlock the potential value and monetise its investment in the development of the Pavilion Bukit Jalil Mall.

Malton said the cash proceeds received from the proposed disposal is envisaged to alleviate the financial burden of the group moving forward vis-à-vis completing the development entirely with the group’s own financial resources.

It added that the cash proceeds received from the stake sale is expected to facilitate the completion of the Pavilion Bukit Jalil Mall without any delay to the group’s expected completion date of March 2021.

In a nutshell, upon completion of the stake sale, Malton’s Khuan Choo and Lim will own a 49% and 51% stake respectively in Regal Path that holds a 49% stake in Pavilion Bukit Jalil Mall. Meanwhile, Malton will still have the majority 51% stake in the development.  

As for QIA, its unit QPBJ will be the redeemable preference shareholder of Regal Path.

In accordance to the Regal Path subscription Agreement, QPBJ has the option to convert all the RPS-A into ordinary shares pursuant to the reinvestment option and the mandatory redemption, which will result in QPBJ holding approximately 49% of equity interest in Regal Path and Malton’s equity interest in Regal Path will be diluted to approximately 26%, while Lim 25%.

In a separate filing, Malton’s net profit for the third financial quarter ended March 31, 2019 (3QFY19) fell 10% year-on-year to RM6.01 million from RM6.68 million mainly on higher finance costs and taxation, despite higher revenue.

Malton attributed the higher finance costs to adoption on the International Financial Reporting Standard Interpretation Committee (IFRSIC) conclusion pursuant to the Agenda Decision 4 (AD4), whereby the finance costs in relation to the construction totaling RM13.8 million had been charged out to the income statement.

Its quarterly revenue was 9.35% higher at RM193.89 million against RM177.31 million a year ago.

For the cumulative nine months ended March 31,2019 (9MFY19), Malton’s net profit plunged 78.56% to RM12.49 million from RM58.25 million in 9MFY18 despite it recording higher revenue of RM604.76 million compared with RM544.15 million.

Shares of Malton closed unchanged at 53.5 sen on Tuesday, valuing it at a market capitalisation of RM282.56 million. It saw some 753,100 shares changing hands.

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Qatar fund QIA buys stake in Malaysia’s iconic shopping mall Malaysia's Pavillion Bukit Jalil mall. By Mars Woo May 29, 2019 Qatar Investment Authority (QIA), the sovereign wealth fund of the state of Qatar, is acquiring a stake in Malaysia’s Pavillion Bukit Jalil mall, one of the largest regional shopping malls in the country, from listed property developer Malton Berhad. Under the agreement, QIA will inject fresh capital of RM407 million ($97 million) through subscription of redeemable preference shares in Regal Path Sdn Bhd, which will acquire a 49-per cent stake in the iconic mall from Malton for RM1.48 billion ($353 million). Malton’s wholly-owned subsidiary Khuan Choo Realty (KCR) and Desmond Lim via his private vehicle Jelang Tegas will also invest RM207 million ($49 million) and RM216 million ($51.5 million), respectively, in Regal Path through the purchase of redeemable preference shares. Lim serves as the non-executive chairman and the major shareholder of Malton. It was in January of this year when Malton announced that QIA has obtained approval from its investment committee to participate in the stake sale of Pavilion Bukit Jalil, which has an estimated net lettable area of 1.8 million square feet. The announcement is the latest example of QIA investing in high-end, world-leading retail outlets and real estate across the globe, according to Malton. These investments fortify a long-term strategy to build a portfolio, which includes some of the world’s most significant retail businesses and real estate across Asia, America and Europe – a strategy that has allowed QIA to build close and trusting relationships with the numerous partners in international real estate and retail. “We are very happy to have QIA on board and their participation in the Pavilion Bukit Jalil mall project is indeed a testimony of QIA’s confidence not just in the projects managed under the Pavilion brand, but Malaysia as a stable and high-potential investment destination,” Lim said. Sitting on a 28-acre freehold land, the Pavilion Bukit Jalil is poised to become one of the country’s largest regional shopping hub. It will house five levels of retail space, two levels of basement parking with 4,717 car park bays, and a centralised green area measuring approximately 3.69 acres. The regional shopping mall is part of the 50-acre Bukit Jalil City integrated lifestyle development comprising Signature Shop Offices, The Park Sky Residence and The Park 2.

Read more at: https://www.dealstreetasia.com/stories/qia-...ia-mall-137986/

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