Landmarks' proposed asset sale to Blumont is fair and reasonable, shareholders told

KUALA LUMPUR (March 24): Landmarks Bhd's proposed disposal of its Indonesian hospitality assets to Singapore-listed Blumont Group Ltd is fair, reasonable and not detrimental to the non-interested shareholders of the company, according to independent adviser FHMH Corporate Advisory Sdn Bhd.

Recall that Landmarks proposed last October to sell its entire stakes in five subsidiaries to Blumont for a combined S$63.4 million (about RM195.1 million), which would be fully satisfied via the issuance of 12.68 billion new shares in Blumont at S$0.005 (approximately 1.5 sen) per share. On completion of the deal, Landmarks will have 29.3% in Blumont's enlarged issued share capital.

The transaction is deemed a related party transaction as Landmark's executive deputy chairman, chief executive officer and substantial shareholder Mark Wee is also the controlling shareholder of Blumont.

Under the deal, it is disposing of its 49% stake in Mendol Investments Pte Ltd, 100% interest in Hinako Investments Pte Ltd, 60% in Prime Holdings Pte Ltd, 60% in Enggano Investments Pte Ltd and 60% in Mesawak Investments Pte Ltd.

These companies are involved in operations and/or own lands located in Chill Cove — a 52ha waterfront resort city situated within Treasure Bay Bintan on the Indonesian island of Bintan, developed by Landmarks and its subsidiaries. Chill Cove is an attraction park comprising a five-star hotel, an activity hub, a desert-inspired glamping concept resort and a marine park.

In a bourse filing Thursday, the independent adviser said Landmarks, in which Genting Bhd owns a 24.98% stake, experienced a major slowdown in business due to the disruptive stop-and-start economy since the start of the Covid-19 pandemic.

The disposal, it said, would enable Landmarks to preserve significant cash outlay and reduce overhead cost, in particular the capital expenditure required for the development of Enggano Land and Mesawak Land.

It will also be able to save on operational costs for Natra Bintan Hotel and the Marine Park, while retaining an associate stake in Blumont via the consideration shares.

“The consideration shares can also be leveraged as security for borrowings or used to raise funds through its disposal as and when required by Landmarks. The proposed disposals, involving approximately 13.5ha, will also enable the development of the surrounding land to be undertaken by Blumont.

“Upon completion of the development by Blumont, the resort will start to attract other investment interests on Landmarks Group's remaining land surrounding Chill Cove, measuring some 38.5ha,” it shared.

Landmarks' shares were unchanged at 26 sen at the time of writing, valuing the group at RM174.53 million.

Source: TheEdge - 25 Mar 2022