Eco World International completes first stage UK acquisition for RM348 million

PETALING JAYA: EcoWorld International Bhd (EWI) has completed the acquisition of the first part of a two-stage deal, to jointly develop 12 project sites in Greater London and South East London with Be Living Holdings Ltd, for £63.76 million (RM348.47 million).
The completion of the first stage of the acquisitions adds six new sites to its existing three projects in London.
The estimated gross development value (GDV) of the six sites is approximately £1.1 billion (RM6 billion), which will bring total remaining GDV to slightly more than double remaining GDV of £1.01 billion from its ongoing UK projects.
EWI told the stock exchange that it has also entered into a definitive agreements for the second part of the deal, which will potentially add another six sites with a GDV of £1.5 billion.
Upon completion of the acquisition, its total number of projects in the UK will increase from three when it was listed around this time last year to 15 in total.
"The completion of the stage one acquisitions marks the start of a new era for EcoWorld International in the UK. Going forward, we are well positioned to grow our UK business strongly to meet both local and international demand in the traditional Open Market Sale (OMS) subsector as well as rising institutional demand in the Built-to-Rent (BTR) subsector," EWI president and CEO Datuk Teow Leong Seng said.
Commenting on the group’s prospects, Teow highlighted that local demand in the mid mainstream market currently exceeds supply.
On the funding front, EWI said the stage one acquisition was completed using proceeds raised from the group's initial public offering (IPO) in April 2017.
With regard to the stage two acquisitions, the group said its share of the estimated purchase consideration of £40.36 million (RM220.57 million) is expected to be funded by bank borrowings, other debt instruments and/or internally-generated funds. This is in view of its low gearing level of 0.05 times as at Oct 31, 2017 after taking into account the RM2.5 billion raised from the IPO.
At the noon break, EWI's share price slipped one sen or 0.98% to RM1.01, with 67,600 shares changing hands.