UEM Edgenta Receives Notice Of Intention To Purchase Its 61.2% Stake In Opus International Consultants Limited At An Attractive Premium – Part Proceeds Will be Used to Pare Down Debt. Company Will Focus on Driving Operational Excellence Initiatives, Organic Growth and Sustain Dividend Payout in the Future

August 14, 2017 Press Release No Comments

KUALA LUMPUR, 14 August 2017 – UEM Edgenta Berhad (“UEM Edgenta” or “Company”) announced today that it plans to dispose of its 61.2 percent equity stake or 90,511,615 ordinary shares in its New Zealand-based subsidiary, Opus International Consultants Limited (“OIC”) following a notice of intention received from WSP Global Inc. (“WSP”), a Canadian company listed on the Toronto Stock Exchange that provides management and consultancy services to the built and natural environment.

The disposal will be made via UEM Edgenta’s wholly owned subsidiary, Opus International (NZ) Limited (“ONZ”). ONZ is a wholly owned subsidiary of Opus Group Berhad (“OGB”) which in turn is wholly owned by the Company.

UEM Edgenta will retain OGB, an entity that focuses on project management and design consultancy operating in Malaysia and Indonesia, and which has been drawing resources from OIC primarily in the asset management and consultancy businesses in the expressway sector. OGB via its wholly owned subsidiary Opus International (M) Berhad (“OIM”) will amongst others, continue to provide Asset Consultancy services in the two countries and this includes supporting UEM Group Berhad (“UEM Group”) (the parent company of UEM Edgenta) in delivering the Pan Borneo Highway Project in Sabah.

The proposed disposal of OIC is an opportunity for UEM Edgenta to monetise its investment upfront at a healthy premium over the current market price and will enable the Company to reduce its gross gearing from 0.8x (post drawdown of Sukuk of RM300 million in April 2017) to 0.4x, and provide the opportunity to sustain dividend payout to its shareholders in the future. Notwithstanding the disposal, UEM Edgenta will still be able to draw on the experience and resources of OIC albeit as a third-party consultant and by extension, WSP’s wide ranging engineering capabilities.

Dato’ Azmir Merican, Managing Director/Chief Executive Officer of UEM Edgenta said, “Proceeds from the proposed disposal will be used to, amongst others, pare down debts. It will also provide UEM Edgenta with the financial resources and enable management to focus on driving as well as supporting the organic growth and operational excellence initiatives in our core sectors spanning Healthcare, Infrastructure and Real Estate in key markets namely Malaysia, Singapore, Indonesia, Taiwan, India, other South East Asian countries, and the Middle East region.”

At present, UEM Edgenta is the region’s leading total asset solutions provider for the Healthcare, Infrastructure and Real Estate sectors.  It is the leading support services provider for the private and public healthcare segments, an industry leader in Malaysia and Taiwan, and holds the number two position for the same segment in Singapore. The Company is also the leading infrastructure service provider in the road sector providing consultancy, advisory and contracting services for over 2,500 kilometres of highways and major roads in Malaysia and Indonesia.  In addition, UEM Edgenta provides services in the Real Estate sector, specifically Township Management Services within Malaysia.

WSP’s intention to purchase will be via all cash consideration for OIC, an entity listed on the New Zealand Stock Exchange, of NZD1.78 per OIC share, totalling NZD263.2 million (equivalent to RM823.6 million based on RM:NZD foreign exchange rate of 3.1287).  In addition, the terms of the offer allow the OIC board to declare and pay to OIC shareholders a fully imputed cash dividend of up to NZD0.07 per OIC share without an offer price adjustment (totalling NZD10.4 million or RM32.4 million).

The offer of NZD1.78 plus the NZD0.07 dividend would represent cash proceeds to OIC shareholders of NZD1.85 per OIC share (totalling NZD273.6 million or RM856.0 million).  Gross proceeds to UEM Edgenta amounts to NZD167.4 million (about RM523.9 million) for its 61.2% equity stake in OIC.

The cash offer price of NZD1.78 per OIC share combined with the cash dividend of NZD0.07 per OIC share represents a very attractive premium to the current share price and the recent trading history of OIC, specifically it translates to:

  • A premium of 86.9 percent to the closing price per OIC Share of NZD0.99 on August 11, 2017 (being the last business day prior to this announcement);
  • A premium of 58.1 percent to OIC’s 52-week high daily closing share price of NZD1.17; and
  • A premium of 85.1 percent and 84.8 percent to the one and three-month volume weighted average price per OIC Share for the period ended on August 11, 2017 (being the last business day prior to the date of this announcement), of NZD0.9994 and NZD1.0012, respectively.

UEM Edgenta has entered into a Lock-Up Agreement to sell its 61.2 percent shareholding via ONZ in OIC to WSP, subject to its shareholder approval at a General Meeting (“GM”) expected to be convened in Fourth Quarter of 2017. The Company’s major shareholder, UEM Group has provided an undertaking to vote in favour of the proposed disposal.

The sale of OIC to WSP provides an opportunity for OIC to greatly leverage on WSP’s customer base and strong international brand equity to significantly bolster its positioning and growth outside of New Zealand. WSP on the other hand will be able to take advantage of OIC’s expertise in the infrastructure (transportation and water) and building sectors as well as in asset development/management.

Based in Montreal, Canada, WSP is a leading professional services firm, providing technical expertise and strategic advice to clients in the Property & Buildings, Transportation & Infrastructure, Environment, Industry, Resources (including Mining and Oil & Gas) and Power & Energy sectors. It also offers highly specialised services in project delivery and strategic consulting. It has 37,000 talented people in more than 500 offices across 40 countries.