UEM World to streamline ops

PETALING JAYA: UEM World Bhd is expected to announce in the next few days a major corporate exercise that could possibly involve the streamlining of the group's business structure to turn it into a pure property play, sources said.
The sources said the four listed companies in the UEM World stable – UEM Builders Bhd, Opus Group Bhd, Pharmaniaga Bhd and Cement Industries of Malaysia Bhd (Cima) – were expected to be transferred to UEM Group Bhd. UEM Group controls UEM World.
How the transfer would be structured is not known as those involved in the crafting of the deal are still looking at various options. One option is for all the shares held by UEM World in the four companies to be distributed to shareholders as dividends. The other option is for UEM Group to buy UEM World’s stakes in those companies.
UEM World has a 51.7% stake in listed construction firm UEM Builders, 62.4% in Opus, an asset management consultant, 72.5% in Pharmaniaga and 51.2% in Cima.
It is also unclear if UEM Environment Sdn Bhd, another firm in the stable, would be part of the exercise.
UEM World yesterday requested the suspension of trading in its shares and that of UEM Builders, Opus, Pharmaniaga and Cima until 5pm tomorrow.
It did not give any details, apart from saying the request was related to a material corporate exercise involving a major change in business direction.
Shares in UEM World were up 12 sen, or 3%, to RM4.12 before their suspension; Opus inched up 2½ sen to 6 sen; UEM Builders was marginally higher by two sen at RM1.26; and Cima rose 35 sen, or 6.7%, to RM5.60. Pharmaniaga gained the most, advancing 68 sen, or 22%, to RM3.78.
A source said after the transfer, UEM World would be left with UEM Land Sdn Bhd, developer of the Nusajaya township in Johor's Iskandar Development Region (IDR).
UEM World currently derives the bulk of its revenue from its property unit, UEM Land.
Having these subsidiaries under its ambit dilutes its focus as a pure property play. Furthermore, the group's valuation may not necessarily reflect its property assets, given that it is subject to a holding company discount.
Freeing up UEM World's structure would made the company more visible as a property play and give investors direct exposure to the fast growing IDR, the source said.
The details have not been finalised yet but it is understood that those working on the deal are looking at how it would benefit shareholders and affect the UEM Group. UEM World officials contacted by StarBiz were unable to provide any details.
The source also did not rule out the possibility of a backdoor listing for UEM Land.-www.thestar.com.my