AMMB ends JV with ARA Asset, inks deal with Amcorp Prop to manage REIT

KUALA LUMPUR (Jan 5): AMMB Holdings Bhd is terminating its joint venture with Singapore-based ARA Asset Management (Malaysia) Ltd, and is instead signing a new agreement with Amcorp Properties Bhd to manage its real estate investment trust.

AMMB said its wholly-owned subsidiary AmInvestment Group Bhd (AIGB) signed the termination agreement as ARA Asset plans to dispose of its entire 30% shareholding in Am ARA REIT Holdings Sdn Bhd.

This confirms a report in the Dec 18-24 edition of The Edge Malaysia weekly that ARA Asset may have to divest the 30% stake as it will be setting up its own REIT and there may be a conflict of interest.

In February 2006, AIGB and Am ARA Asset had agreed to set up Am ARA REIT Holdings on a 70:30 basis. Am ARA REIT Holdings undertakes the management of AmFirst REIT, whic is listed on the Main Market of Bursa Malaysia Securities Bhd, AMMB said in a filing today.

“As Am ARA Asset has ceased to be a shareholder of Am ARA REIT Holdings, AIGB and ARA have mutually agreed on the termination of the JV,” AMMB said, adding that the termination would not have any effect on the group’s share capital and shareholding of the substantial shareholders.

The termination would also not have any material effect on AMMB’s earnings and net assets for the financial year ending March 31, 2018.

Meanwhile, the new JV with Amcorp does not change AIGB’s existing 70% stake in Am ARA REIT Holdings.

AIGB’s shareholders agreement with Amcorp entered today is to regulate the relationships relating to the rights and obligations of the shareholders of REIT Holdings and REIT Managers.

The partnership with Amcorp will provide Am ARA REIT Holdings the opportunity to leverage on Amcorp’s experience in property development and investments to jointly pursue future investment opportunities with the objective to grow the AmFIRST REIT.

Amcorp is 71%-owned by Amcorp Group Bhd (Amcorp Group), which is also a substantial shareholder of AMMB.

Amcorp Group is a wholly-owned subsidiary of Clear Goal Sdn Bhd (CGSB) which is 99.99% owned by AMMB chairman Tan Sri Azman Hashim.

Azman is also a director of Amcorp Group and AIGB. Azman is deemed interested in the new JV arrangement by virtue of him being a major shareholder of CGSB, Amcorp Group, AMMB and Amcorp via Amcorp Group.

At closing of trade today, AMMB rose one sen or 0.22% to RM4.60 for a market capitalisation of RM13.8 billion and Amcorp grew 1.5 sen or 2% to 76.5 sen, valuing the company at RM453.52 million.

AmFIRST remained unchanged at 67.5 sen for a market capitalisation of RM463.32 million. — theedgemarkets.com

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