Eco World International acquires remaining 20% stake in Yarra One developer for RM13.25m

PETALING JAYA: Eco World International Bhd is acquiring the remaining 20% stake in Eco World-Salcon Y1 Pty Ltd (EW-Salcon), the developer of the Yarra One project in Australia, for A$4.52 million (about RM13.25 million) cash.

In a filing with Bursa , the group said its wholly owned subsidiary Fortune Quest Group Ltd entered into a conditional share sale and purchase agreement (share SPA) with Salcon Bhd’s wholly owned subsidiary Salcon Development Sdn Bhd for the acquisition.

EW-Salcon is the registered proprietor of the freehold lands measuring 2,128 square metres located at South Yarra, Victoria in Australia, on which it is developing a residential-led mixed used development named Yarra One.

The project comprises 250 residential units, 17 office and retail units and 183 car park spaces across 27 storeys and four basement levels, with an estimated gross development value of A$253.2 million (about RM742.4 million).

The project has a net book value of A$57.78 million based on EW-Salcon accounts for the financial period ended Jan 31, 2019. Construction commenced in the second quarter of 2018 with completion expected in the second half of 2020.

“In light of Salcon’s intention to dispose of its 20% equity interest in EW-Salcon, we decided to undertake the proposed acquisition as we believe in the prospects of the Yarra One project. The proposed acquisition will enable us to recognise 100% of the profits to be derived from the Yarra One project upon completion and handover of units,” said Eco World International.

Since the launch in June 2017, EW-Salcon has secured A$132.6 million (about RM388.9 million) sales up to the end of February 2019, representing a 60% of the total units launched.

The purchase consideration will be funded via bank borrowings, other debt instruments and/or internally generated funds.

In a separate filing, Salcon said the proposed disposal would allow the group to strengthen its financial position arising from the disposal consideration and the capital, which was earmarked for the Yarra One project, would be used for future investments and/or working capital purposes.

“Hence, Salcon will be able to re-mobilise its financial resources to pursue potential investment opportunities,” it said. The group is expected to realise a net gain of about RM931,560 upon completion of the deal, which is expected by the second quarter of 2019.

Source: The Sun Daily

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