Philippines’s largest real estate firm Ayala Land Inc has acquired a substantial stake in newly listed Malaysian property developer MCT Bhd, emerging as an anchor investor alongside Malaysia’s Pilgrims Fund Board.
The acquisition was done through a private placement of $43 million or P1.9 billion for 9.16 percent of the shares in MCT.
In a filing with the Philippine Stock Exchange Monday, Ayala Land said its wholly-owned subsidiary Regent Wise Investments Ltd has acquired the stake in Malaysian company GW Plastics Holdings Bhd – a company renamed Modular Construction Technology Bhd (MCT Bhd) upon its listing yesterday.
MCT debuted on the Bursa Malaysia Main Market at an opening price of MYR1.43, 11.72 per cent north of its MYR1.28 offer price. The property counter closed at MYR1.33 yesterday.
The listing, which was about two-third endorsed by anchor investors, had also attracted the Pilgrims Fund Board, or Lembaga Tabung Haji, to invest.
The government-linked investment corporation took up a 10 per cent stake in MCT valued at $47 million or MYR170.9 million. The Pilgrims Fund Board has close to MYR50 billion in fund size.
Reflective of the slower IPO market Bursa Malaysia had foreseen, MCT’s listing is the first for Malaysia this year as there was no listing in the first quarter of the year.
Ayala Land’s announcement on the stock exchange explained that the deal “allows Ayala Land to enter the Malaysian market with an experienced team, benefit from synergies of the partnership, and further add value to MCT over the long-term to enable it to be a key player in the Malaysian real estate market”.
When asked about MCT’s intention to leverage on the partnership to expand in the region, MCT CEO Tong Seech Wi told a media conference after the listing ceremony, that the group would like to focus on developing in Malaysia for now, with most of its projects and land bank concentrated in the Klang Valley.
With the stake acquisition, Ayala Land receives one board seat in MCT.
Filipino media GMA News reported that Ayala Land president and CEO Bernard Vincent Dy said through the board seat, Ayala Land will have some influence in terms of the strategic direction of the company. “But in terms of day-to-day management, we are not anticipating it,” he said in a separate briefing after a stockholders’ meeting on Monday.
“We feel that Malaysia is a market that shows a lot of opportunity for us to participate in. And we were able to find a company and we hope to grow the company with them,” he added.
On potentially raising its stake in MCT, Ayala Land said it is keeping its doors open to the possibility of further raising its stake in the Malaysian company, but it will not bring its brand in Malaysia since its partner has already established its own brand.
“We’ll see how things turn out. When we talk of opportunities, we don’t know what’s going to come down the line. We will evaluate if there’s an opportunity [to raise stake],” he said.
Similarly, Tong told local daily The Star that MCT founder and deputy executive chairman Barry Goh and himself would consider paring down their shareholding to allow strategic investors to up their stakes or to make way for new investors, provided “the interested party can value add”.
“Although we have no intention to, but if there is an interested party that can bring value to the company, we would be open for discussion,” Tong said.
MCT’s major shareholder at the listing are Goh (42.68 per cent), Tong (22.98 per cent), Pilgrims Fund Board (10 per cent), Ayala Land (9.16 per cent), other government-linked investment corporations and insurance funds (5.88 per cent).
Ayala Land is one of the largest real estate developers in the Philippines, best known for its fully integrated developments, which include estates, residences, malls, offices as well as hotel and resorts.
The developer has a market capitalisation of about 587 billion peso ($13.2 billion), five times higher than the largest listed Malaysian property player in terms of market capitalisation.
MCT is a property developer specializing in mixed-use projects that include retail, office, hotel, and mid- to affordable residential units. The company focuses on modular construction and has an integrated builder with an in-house design team, in-house trading company, direct execution of specialist works and its own pre-cast and ready-mixed concrete plants to deliver projects at lower costs.
The company has several ongoing projects in OneCity Subang Jaya and Cyberjaya, as well as a land bank in Dengkil, 1.5 kilometers south of Cyberjaya, all in Malaysia’s Klang Valley. It has two upcoming projects in Johor Bahru and Penang too.
In total, it has ongoing projects with gross development value (GDV) of MYR2.26 billion ($620 million) and future projects with GDV of MYR6.72 billion ($1.85 billion), excluding a remaining land bank of 296 acres with the GDV yet to be finalised.
On Thursday, the company fixed the offer price of its placement shares at RM1.28 each, bringing the gross proceeds raised by the company and the vendors to MYR384 million ($105.5 million) and MYR195 million ($53.5 million) respectively.
Based on the MYR1.28 price, MCT’s implied market capitalisation is MYR1.71bil with an enlarged share capital of 1.33 billion shares. The group’s listing was done via a reverse takeover last year, of GW Plastics Holdings which had first acquired MCT Consortium Bhd.