IWCity's share price drops further

KUALA LUMPUR (May 18): Iskandar Waterfront City Bhd's (IWCity) share price slips lower by as much as 6.88% or 13 sen to RM1.76 today amidst the uncertainties arising from the Bandar Malaysia project.

The investing fraternity is pondering whether IWCity's sister company, Iskandar Waterfront Holdings Sdn Bhd (IWH), will have the chance to participate in any consortium to submit a bid for the development.

The stock pares down some losses in the afternoon session but remains in the negative zone.

As at 4.10pm, the counter was trading at RM1.81, down eight sen or 4.23%. However, its trading volume has contracted to only 23.58 million shares compared with the previous trading days when over 200 million shares were changing hands.

At the share price of RM1.81, IWCity's market capitalisation stands at RM1.48 billion.

Since the beginning of this month, IWCity's share price has lost some 43.8% from RM3.22 on May 2, nearly RM900 million in market capitalisation has been wiped out so far.

The group's share price started to fall after the termination of a deal by TRX City Sdn Bhd, a former unit of 1Malaysia Development Bhd, on May 3 to sell a 60% stake in the Bandar Malaysia project to IWH CREC Sdn Bhd for RM7.41 billion.

IWH CREC is a 60:40 joint venture between IWH and China state-owned China Railway Engineering Corp (M) Sdn Bhd (CREC), with the Johor state government owning 40% of IWH through Kumpulan Prasarana Rakyat Johor Sdn Bhd.

Businessman Tan Sri Lim Kang Hoo is the common major shareholder in IWCity and IWH.

The collapse of the deal had a negative impact on IWCity — which has proposed a merger with sister company IWH through a share swap exercise — given that IWH's interest in Bandar Malaysia was considered the crown jewel of the merger exercise.

Yesterday, Prime Minister Datuk Seri Najib Tun Razak said TRX City will soon announce the request for proposal process to select the master developer of the Bandar Malaysia real estate project.

The planned Bandar Malaysia project is on a 194ha (486 acre/21.17 million sq ft) tract within the old airport site in Sungai Besi here.

Najib reportedly said the master developer selection would involve strict criteria including a proven track record, speed of delivery, content creation, and the financial capability to deliver a project of this scale.

The highest possible value will be sought to ensure the best deal for the taxpayer is obtained.

Bernama reported that Najib said during his recent visit to China, the Malaysian Government and China-based Dalian Wanda Group Co Ltd had discussed the possibility of Dalian Wanda becoming Bandar Malaysia's master developer.

Najib said he believed diversified entity Dalian Wanda was in a position to undertake the Bandar Malaysia project and that the Malaysian Government was willing to discuss the possibility of developing Bandar Malaysia with Dalian Wanda. — theedgemarkets.com

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