The announcement on Bursa Malaysia indicates UEM Sunrise’s board of directors received the letter from UEM Group on Oct 2, proposing for the two companies to merge through an exchange of shares and warrants.
EcoWorld will subsequently be delisted from Bursa Malaysia.
“The (UEM Sunrise) board will deliberate on the proposal and decide on the next course of action. Accordingly, a further announcement will be made in due course,” Bursa said today.
In the letter, UEM Group said it would expect a decision on the proposal by Oct 30 for further discussions on the merger to commence.
It said the merger would improve the merged entity’s scope and execution abilities, leading to greater value creation in the future for shareholders of both companies.
It also said there was a need for industry players to consolidate their resources in the current economic climate to enhance performance and ensure sustainability.
“We envisage that upon the completion of the proposed merger, the enlarged UEM Sunrise group will focus on property developments within Malaysia and the planned developments on land owned by UEM Sunrise that is outside of Malaysia.
“This will allow the enlarged UEM Sunrise group to stay focused on property developments within Malaysia,” it said.
It said Khazanah will remain the biggest shareholder once the merger is completed, followed by the significant shareholders of EcoWorld collectively.
It also proposed for the chairman of the enlarged company to be appointed from among existing board members of UEM Sunrise.
UEM Group also urged against any dismissal of staff following the merger, although it acknowledged there would be a need to streamline the merged company’s operations.
“Taking into account the adverse impact of Covid-19 on the job market, we hope there will not be any immediate redundancy or dismissal of staff of the parties as a direct consequence of the proposed merger.
“A new employees’ share option scheme for the employees of the enlarged UEM Sunrise group is also proposed to be implemented under the proposed merger,” it said.