SINGAPORE - Singapore-listed property firm GuocoLand announced on Thursday (Oct 27) that it is expanding into new markets of London and Sydney by taking up a strategic stake in Eco World International (EWI).
EWI is the overseas unit of Malaysian-listed developer Eco World Development Group Bhd.
GuocoLand said it will subscribe for a 27 per cent strategic stake in EWI when the firm launches its initial public offering on Bursa Malaysia Securities by the first quarter of 2017.
EWI will be issuing up to 2.153 billion new shares in the upcoming IPO exercise.
Eco World Development Group will also take up a 27 per cent stake in EWI - making the two firms major shareholders of EWI post-listing.
Allocation of shares will also comprise a retail offering which will account for 17 per cent of total shares, an institutional offering which constitutes 18.7 per cent of the shares and the existing 10.3 per cent stake ( or 246.5 million shares) held by EWI executive vice chairman Mr Liew Kee Sin.
Of the retail offering, 2 per cent of the shares will be offered to the Malaysian public, 10 per cent to shareholders of Eco World Development Group and 5 per cent to the directors and employees of EWI and Eco World Development Group.
The enlarged paid up capital post-listing be 2.4 billion shares.
The proposed listing of EWI is targeted to raise more than RM2 billion (about S$670 million) to fund the development of four projects in London and Sydney.
Pricing of the new IPO shares has not been fixed and will largely be determined by way of a book building process.
"The UK and Australia property markets offer scalability, and we believe that with the right products and locations, they provide reasonable returns," said GuocoLand group president and chief executive Raymond Choong.
Speaking at a signing ceremony in Kuala Lumpur, Mr Choong added that taking up a 27 per cent strategic stake in EWI's upcoming IPO in Malaysia will give GuocoLand an immediate pipeline of on going projects in London and Sydney.
EWI's Mr Liew, Eco World Development Group and GuocoLand signed a shareholders' agreement on Thursday.
GuocoLand currently has operations in Singapore, Malaysia, China and Vietnam, and will expand outside of Asia with the latest move to invest in EWI.