UEM World Bhd, which is set to announce a change in its business direction today, may say it plans to take its listed units private via share swaps, says JPMorgan."Such an exercise could be aimed at upstreaming all the cash within the subsidiaries to finance the working capital needs for Iskandar Development Region (Iskandar)," the foreign research house told clients in a note outlining two possible scenarios for UEM World's restructuring.Gross cash from UEM World's four listed units - UEM Builders, Cement Industries of Malaysia, Opus Group and Pharmaniaga - is estimated at around RM837 million.UEM World owns 71.5 per cent of UEM Land, which is the master developer of Iskandar's Bandar Nusajaya, Malaysia's biggest property project.The other scenario, which JPMorgan believes is less likely to happen, is for UEM World to raise the cash it needs by disposing of or paring down its stakes in the listed units, possibly to Middle Eastern investors. This way, the only asset remaining in the company would be UEM Land. "This could then lead to a backdoor listing of UEM Land, and achieves the objectives of 'ring-fencing' the IDR (Iskandar) investment case away from the remaining businesses," JPMorgan said.It however believes that this scenario would be counter-intuitive to Khazanah Nasional Bhd's restructuring thrusts for the government-linked company. Khazanah owns 51.9 per cent of UEM World.
(New Straits Times 15-2-2008)
