Green light for OSK Property and PJ Development merger, value RM1.7bil

Shareholders of OSK Holdings Bhd have given the green light for the merger with OSK Property Holdings Bhd and PJ Development Bhd, esteemed at RM1.71bil.

According to The Star, the move will see OSK Holdings rising as a first-level property organization in Malaysia.

“We will begin instantly. The S&P (sales and purchase) will be finished soon,” said group managing director Tan Sri Ong Leong Huat.

As a consolidated entity, OSK Holdings would have a total gross development value of RM13.3bil.

It will have landbank totalling 1,297 acres of land in Malaysia and another five acres of land in Melbourne, Australia. The organization has about RM1.5bil in unbilled deals that will give an enduring pipeline of income development. It additionally has new projects going ahead stream.

Regardless of business concerns of a slowdown in the property market, Ong noticed that costs had been moderately steady.

“We didn’t see costs dropping in any case. The margins here are generally low at around 10% to 20% dissimilar to different countries where it’s 30% to 40%. We are still less expensive than whatever remains of the world despite the fact that we are semi developed,” he said. He included that “political bickering” had prompted an absence of certainty among financial specialists, which thusly brought in the currency falling to a pointlessly low.

“The economy has solid fundamentals contrasted and numerous different countries in this part of the world. There’s a purpose behind that yet that reason won’t last forever. It will be overcome and we will have the capacity to recoup not long from now. The Malaysian economy is by and large truly stable,” Ong said.

He said the weakened ringgit could imply that its property was more appealing, particularly to foreign purchasers.

“For properties for foreign purchasers, I think our ringgit is shabby, which makes it less expensive for individuals of countries with monetary standards that are generally solid. I think that will likewise pull in individuals to invest.

“Whatever goes down must return up,” he said.

The combined income profile will see 40% from property, another 40% from financial administrations and the staying 20% from hotels and building materials.

Aside from its 9.96% stake in RHB Capital Bhd, OSK Holdings has the cash lending business, which according to Ong, is contributing a considerable measure of profit.

Post-merger, he said, there would be no requirement for retrenchment of any staff. Maybe, the organization expects to hope to expand its ability base, from 2,000 as of now.

Under the activity, OSK Holdings would gain 72.4% of shares in OSK Property for RM346.4mil or RM1.95 per OSK Property share. It will likewise purchase a 31.6% equity interest in PJ Development for RM223.64mil or RM1.56 per share.

It will also make a general offer to procure the remaining shares and outstanding warrants in OSK Property and PJ Development from minority shareholders, which could bring about RM1.14bil cash, accepting shareholders settled on money. It hopes to finish the entire practice by September 2015.