Private developer Eco World Development Group Bhd has called off a proposed merger with government-linked property developer UEM Sunrise Bhd.

The merger, if realised, would have resulted in one of Malaysia’s largest real estate companies by market value.

In a statement, EcoWorld chairman Liew Kee Sin said the decision was made after evaluating the proposal with its business plans, while considering the current business environment and lockdown reimplementation.

With the proposed merger cancelled, he said, EcoWorld will be actively pursuing other corporate proposals that would better complement its current growth plans and strategies.

“It will also enable us to focus on the group’s own business plans for the 2021 financial year, which includes a sales target of RM2.875 billion for EcoWorld, that is 25% higher than the actual RM2.3 billion sales recorded in 2020.

“On behalf of the board, I would like to thank UEM Group Bhd for its invitation to consider the proposed merger with UEM Sunrise. We certainly remain open to the possibility of future collaborations with UEM Sunrise, should another opportunity arise.”

UEM Sunrise, the property arm of sovereign wealth fund Khazanah Nasional Bhd, is the company behind the Mont Kiara and Dutamas developments in Kuala Lumpur which are among its various projects in the Greater Kuala Lumpur area, Iskandar Puteri, Johor; Singapore and Australia.

EcoWorld is the developer of the Bukit Bintang City Centre project in Kuala Lumpur, among its developments in the Klang Valley, and projects in Iskandar Malaysia, Penang, Singapore and the UK.

In October 2020, UEM Sunrise received a letter of proposal from UEM Group Bhd for a merger with EcoWorld through an exchange of shares and warrants. EcoWorld was to have been subsequently delisted from Bursa Malaysia.

Under the proposal, Khazanah would have remained the biggest shareholder after completion of the merger, followed by the significant shareholders of EcoWorld collectively.

The merger proposal was met by protests, with former deputy housing minister Raja Kamarul Bahrin and Amanah strategy director Dzulkefly Ahmad questioning why a subsidiary of Khazanah Nasional needed to “bail out” EcoWorld.

Federal Territories Umno Youth had also urged the Perikatan Nasional government to stop the proposed merger, questioning how it would benefit Khazanah and the finance ministry.

Source: FreeMalaysiaToday.com