E&O shareholders approve STP2 land sale

KUALA LUMPUR (Aug 8): Eastern & Oriental Bhd (E&O) shareholders have approved the disposal of a 1.445 million-sq ft plot in the Seri Tanjung Pinang phase 2 (STP2) project for RM766 million. The land — sold by its subsidiary Tanjung Pinang Development Sdn Bhd (TPD) to Kumpulan Wang Persaraaan (Diperbadankan) (KWAP) — covers 20% of the net development land in phase 2A (STP2A) of the reclamation project on the northeast coast of Penang island where TPD has been granted the concession rights to develop and do reclamation works. STP2A, the 760-acre (307.56ha) project’s first phase, has a total gross area of about 250 acres.

E&O managing director Kok Tuck Cheong said the go-ahead from shareholders in an extraordinary general meeting yesterday is a milestone towards realising the group’s partnership with KWAP to develop STP2A. “A special-purpose vehicle, Persada Mentari Sdn Bhd (PMSB), has been formed for this reason and will be owned by TPD and KWAP on an 80% and 20% basis respectively,” he said in a statement.

Kok said the shareholders’ approval reinforces the management’s direction and belief that STP2A will be a major earnings driver for E&O over the next decade. “The sale of the land will enable the group to unlock the value of our investment in STP2A, realise [the] capital appreciation of the land and partially monetise our investment in STP2A. [More] importantly, it allows the group to further reinvest in the development of STP2A.”

The proceeds from the land disposal will be used to meet the funding requirements for STP2A reclamation and infrastructure works. E&O said reclamation works for STP2A continue to gain momentum since commencing in early 2016, with completion due within the second half of 2018, barring any unforeseen circumstances. “We are targeting a first launch of STP2A in 2019, marking a significant new chapter in the E&O group’s vision of creating an exemplar integrated development — one that takes pride in what has been achieved in Seri Tanjung Pinang phase 1 — that serves as a ready benchmark for innovation and standards to be elevated in [phase 2],” said Kok.

This article first appeared in The Edge Financial Daily, on Aug 8, 2017.

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