Malaysian tycoon eyes stake in Iskandar Waterfront Holdings

Sources said that parties linked to Quek were looking to acquire a 20 per cent stake in Credence Resources Sdn Bhd, which owns a 60 per cent stake in IWH. The remaining 40 per cent in IWH is held by Kumpulan Prasarana Rakyat Johor, an investment arm of the state government.

 

Apart from developing Danga Bay, IWH recenty secured the mandate to be the master developer of Bandar Malaysia together with China-based China Railway Engineering Corp (CREC). 

 

“The interest expressed is still in preliminary stages with the due diligence being done,” sources said.

 

Credence Resources is a private company owned by Lim Kang Hoo, who is well-known in the construction sector and has carved a niche for himself in land clearing and land reclamation works.

 

In 2014, investment bankers had estimated the listing of IWH to be around US$300 million. But that was based entirely on its 4,300-acre Danga Bay waterfront city in Johor Baru where IWH is the master developer. Almost half the land is under water and being reclaimed in phases.

 

But the listing did not take place. 

 

Now the value of IWH should be higher, as it is part of a consortium that is the master developer of Bandar Malaysia.

 

“If Quek or his related companies buy a stake in Credence Resources, it would be equivalent to a listing as Lim would be able to monetise part of his stake,” said sources.

 

Sources said that Lim was currently on a roadshow as part of his efforts to formulate the masterplan for the Bandar Malaysia project.

 

Bandar Malaysia is a huge development spanning 486 acres, where the plan is to have an integrated underground city modelled after the Montreal underground city in Canada.

 

Bandar Malaysia would also serve as the gateway for the high-speed rail line to Singapore and become a central transport hub with connections to the mass rapid transit lines, KTM Komuter, Express Rail Link and 12 other highways.

 

The 60 per cent stake in the Bandar Malaysia project is jointly owned by IWH and China-based CREC. 

 

The remaining 40 per cent is held by 1Malaysia Development Bhd (1MDB) and may be transferred to the Finance Ministry. For the 60 per cent stake, IWH-CREC needs to pay 7.4 billion ringgit (US$1.90 billion) to 1MDB in phases as the development progresses.

 

The transaction values the entire 486-acre land at 12.35 billion ringgit.

 

Currently, the land houses the Sungai Besi airfield and the Army and Police air wings. The existing facilities will be relocated by 2018 and the cost is included in the 12.35 billion ringgit price tag.

 

It has been said that the Bandar Malaysia project is estimated to have a gross development value (GDV) of 100 billion ringgit over the next 25 years.

 

In Johor, IWH is known as the master developer of the 4,300-acre Danga Bay waterfront city in Johor.

 

In relation to its waterfront development, IWH has gone into partnerships with 11 developers so far to carry out projects along an eight-km coastal stretch of Danga Bay.

 

These projects are reported to have a GDV of 125 billion ringgit and will be done over the next 10 to 15 years.

 

Lim and his family are also linked to four listed companies on Bursa Malaysia, namely, Iskandar Waterfront City Bhd, Ekovest Bhd, Knusford Bhd and PLS Plantations Bhd.

 

The group of companies have diversified interest from developing property to highway concessions.

 

(US$1 = 3.90 ringgit)