E&O to buy out partner for RM47 mil to fully-own Seri Tanjung Pinang concession

• Seri Tanjung Pinang (STP) is a seafront development masterplan on the northeast coast of Penang island. The 240-acre first phase, Seri Tanjung Pinang Phase 1 (STP1), is fully reclaimed and close to completion.
• Phase two (STP2), also known as the Andaman Islands, is itself split into Andaman Phase 1 and Andaman Phase 2.

KUALA LUMPUR (March 28): Eastern & Oriental Bhd (E&O) has proposed to pay RM46.95 million to purchase the remaining 40% equity interest in E&O-PDC Holdings Sdn Bhd from Penang Development Corporation (PDC), to enable E&O to wholly own the Seri Tanjung Pinang reclamation and development concession.

“E&O-PDC owns 30% of Tanjung Pinang Development Sdn Bhd (TPD), while the remaining 70% is held by Permaijana Ribu (M) Sdn Bhd, a wholly-owned indirect subsidiary of E&O,” said E&O in a bourse filing.

TPD holds the concession rights to the reclamation and development of Seri Tanjung Pinang.

“The acquisition of 40% shareholding in E&O-PDC from PDC will enable E&O to own 100% in TPD where the main development activities for the group will be concentrated on over the next 30 years,” E&O said.

Seri Tanjung Pinang (STP) is a seafront development masterplan on the northeast coast of Penang island. The 240-acre first phase, Seri Tanjung Pinang Phase 1 (STP1), is fully reclaimed and close to completion.

Phase two (STP2), also known as the Andaman Islands, is itself split into Andaman Phase 1 and Andaman Phase 2.

The property developer said it has completed reclamation of Andaman Phase 1 and plans to initiate the development of the 253-acre land over the next 15 years with a projected gross development value (GDV) of RM17 billion. 

Meanwhile, the reclamation for Andaman Phase 2 is expected to take another three years to complete and will provide future land bank for development.

“As a result, the group believes that Andaman Island will play a significant role in driving its growth trajectory in Penang in the coming years,” it added.

On the RM46.95 million purchase consideration, E&O said it was based on a willing-buyer, willing-seller basis, and will be funded via a combination of internally generated funds, shareholder advances and external borrowings.

The group said the purchase is not subject to the approval of its shareholders nor any other government authority, and is expected to be completed by December 2023.

Shares in E&O closed half a sen or 1.59% lower at 31 sen on Tuesday (March 28), giving the group a market capitalisation of RM450.64 million.