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Lim Kang Hoo's reverse psychology - felicity

Tan KW
Publish date: Wed, 01 Nov 2017, 01:52 PM
Tan KW
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Good.

Wednesday, November 1, 2017 

 
 
Lim Kang Hoo is either a brilliant strategist or a desperate man. However, come to think of it - how is the deal between Ekovest and IWCITY  a desperate deal? Ekovest, which is a family controlled (>60%) company of Lim Kang Hoo, family and friends is offering to buy MINORITIES IWCITY's stake at RM1.50 per share.

He is not buying his shares of 37% in IWCITY which is held through IWH. He is buying the shares held by the other parties 62% - 63%. There is no injection of cash into IWCITY. He is not desperate to rescue IWCITY. In fact, he is taking OPPORTUNITY. This deal is done at its best so that it does not touch KPRJ which is related to the Sultan of Johor - it seems.


I am of course perplexed when the shares of Ekovest dropped massively.

Having said the above, I can understand the investment communities concerns. IWCITY holds land in Bandar Iskandar which to them cannot be transacted as there is a doldrum in properties especially down south. Moreover, Ekovest will need to fork out RM800 million which it does not have to buy over the minority stake - hence delisting IWCITY.

However, that is flawed thinking. IWCITY just did a deal worth around RM2.1 to RM2.3 billion with Greenland group from China and they are paying for 127 acres of land in Bandar Iskandar.

Because even reading yesterday's one pager announcement cannot even be done properly by those who invested into Ekovest, I hence will put down the payment schedule for IWCITY - Greenland deal below. There are obviously a lot of milestones and the sweet side is that IWCITY has collected the first payment of RM46.2 million. I know that's small but it also means the collection will be going to Ekovest in future rather than the listed IWCITY.


As for raising the RM800 million to buy up the IWCITY minorities stake, I have this prophesy. The payment schedule above will help a bit, then the amount paid by EPF of RM147 million just last week AND more importantly, in its announcement yesterday, one can also opt for an Ekovest share equivalent which is valued at RM1.50. Obviously, Ekovest shares is not worth RM1.50 now and the latest as at my writing now - it is priced at RM0.97. No chance to trade in shares?

If the transaction is done now, all IWCITY minorities will be opting for the cash - me too. But obviously again, the deal is not done now. It is many months down the road, if it is ever pulled through.

Now, my question to Tan Sri Lim Kang Hoo (who is many time more brilliant than me) is which option he prefers - cash or shares. If cash, then obviously again Ekovest is worth more than IWCITY at per share price of RM1.50 or more as he does not want to waste the value of Ekovest to be given to minorities. If shares, then IWCITY is more valuable.

Having seen how he does his deals, it is not going to be that smooth and straight forward. There will be challenges and hurdles.

On the strategy with this deal, as mentioned above there will be challenges but strategically it is there. IWCITY is a land owner. Ekovest is a developer, contractor. There are still some 900 acres of land in IWCITY after the sale to Greenland. Moreover, part of the deal will need IWCITY to reclaim (worth RM400 million) the land which Ekovest can obviously do.

To me what was obvious yesterday has now become murky. An analyst said that the deal is bad. He is perhaps not being straight or thinking clearly.

Or could it be I am too slow to have a clear head as I have become too complicated.
 
 

 

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4 people like this. Showing 20 of 20 comments

brightsmart

yes, writer is getting too complicated.....

point is........300 million shares done this morning...where did the sellers come from?

my money...Ekovest will be 70 sen if deal goes through and $ 1.20 if deal is aborted....place your bets.

on Greenland....even without this deal.....IWC has been traded all these years as if the Greenland deal is not there.

2017-11-01 14:39

godhand

banker or player motherfuc***

2017-11-01 14:52

BenBlurBlur

It is bad for Ekovest because besides having to fork out RM 800m there will be no meaningful profits from the IWC lands for many years.

Good for NTA play may be but very bad for profit play, is it? Thank you.

2017-11-01 15:01

brightsmart

Post removed.Why?

2017-11-01 15:12

brightsmart

LIM has lots of fans and kakis trapped in IWC.....This deal is done to bail out his friends and kakis....for without this deal, IWC would be below $ 1.00 today.

2017-11-01 15:18

TakeProfits

Haha...felicity thank goodness I no follow you. Kena rotan cukup cukup.
Kim this or Lim that ..they all take care of themselves. We are all smart but NOT try to be too smart all the time. Hee haw..heehaw, heehaw. Only I pity all others kena conned...

2017-11-01 15:33

brightsmart

felicity made another mistake regards Ekovest.....

Ekovest even without this deal is not that great.

I think Duke 3 will lose money.

Just as EDL of Johor also lose money.

Sprint and Duke 1 are exceptions.

2017-11-01 15:38

sheep

i think the deal wont go through. it will be status quo for ekovest.

2017-11-01 15:39

brightsmart

if no deal, goes back to $ 1.20.

2017-11-01 15:40

brightsmart

UMWOG is a better bet.

2017-11-01 15:42

Jon Choivo

Ekovest looks interesting at this price. Will be much more interesting at 0.9, 0.8 or 0.7 (pls pls pls). Need to study alot more.

2017-11-01 16:35

Hiu Chee Keong

ekovest investors were screwed !

2017-11-01 19:27

mamatede

Err... penny stocks soon?

2017-11-01 21:28

Stock Kingdom

I feel bad on this article & whatever, Ekovest has gone from simple business entity to very complicated company with lots of hidden things inside.

Market had valued IWC 90c per share before Bandar Malaysia deal, since it was called off & should it be back to where it started?

If it was initially valued by market at 90c, Ekovest is paying RM1.50 for a share worth 90c only. After all, MI of Ekovest are losers, those IWC MI that bought above RM1.50 are also losers.

2017-11-01 21:34

brightsmart

Post removed.Why?

2017-11-02 06:00

brightsmart

no bandar Malaysia
no Johor Sultan injection into IWH
no IWC/ IWH deal

now this deal......

does it look like a man on the rise ...or a drowning man?

2017-11-02 06:32

TakeProfits

Yes agree with you Brightsmart, umwog stands a better chance upwards share price. The support of gomen and all the local institutions. Everyone but some their and hold ..... Ekovest, for now, is at my ekor side. Will be long time before acquired lands are developed.

2017-11-02 09:49

ktsk88

Just don't touch both is the best. We never know how many times they have screwed all the investors with the news of the merger, swapped, MGO, etc.

Obviously they just try to made huge gains for themselves at the expense of the investing public.

Not a conscience biz and corporate person.

2017-11-02 13:26

TakeProfits

Yar ktsk88, the game getting tough for retailers. We get screwed left and right and they leave us bleeding. Mas in the chute. Fgv, no one knows what's going on there. Unwog performance left to be seen. This umwog biz was started at tail end of oil boom. Personally they should know it is cyclical. The no of shares also now 8bn. Not well thought off this listing ...and I wonder whose idea was this? But hopefully let's see how umwog pans out short term.

2017-11-02 13:54

Powerstock

Who wins? Ekovest or IWCity?
Who got power?
IWCity got power?

2017-11-02 22:30

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