PETALING JAYA: Following its failure to secure the consent of its bondholders, IOI Corp Bhd will make a second attempt to persuade them to give their nod to IOI Properties Bhd’s demerger from IOI Corp, sources said.
People close to the plantation giant told StarBiz that IOI Corp would offer better terms to its bondholders and was thus confident of securing their consent.
“IOI Corp is now discussing with its international advisors the terms and timeline for the meeting with the bondholders, which is likely to be called within the next two months,” the source said.
He added that the board of IOI Corp viewed the recent events as a “temporary blip”. The firm was likely to get the approval of the bondholders after it obtained a quorum of 74.9% during the original meeting held on July 22 – a 0.01% shortfall from the 75% acceptances needed.
“Even without any special terms, IOI Corp almost has all the approvals required. With slight improvements to the terms, the nod from the bondholders should not be a problem,” said the source.
IOI Corp needs the green light from its shareholders and bondholders for the demerger to be carried through.
IOI Corp executive chairman and founder Tan Sri Lee Shin Cheng and his family is its single-largest shareholder with a 44.87% stake. It closed yesterday one sen higher to RM5.44 on volume of 3.41 million shares.
In a surprise announcement last week, IOI Corp said the proposals to separate its plantation and property businesses had hit a snag when the bondholders did not sign off on the resolutions.
IOI Corp issued the bonds via IOI Investment (L) Bhd and IOI Ventures (L) Bhd.
IOI Investment owns US$600mil of 4.375% notes due in 2022, while IOI Ventures holds US$500mil of guaranteed notes of 5.25% due in 2015.
The company said the proposals in an extraordinary resolution were not carried out at the noteholders’ meetings on Aug 7, following an “insufficient quorum” during the July 22 meeting.
IOI Corp had announced its intention at the meeting to undertake the corporate exercise which would have separated the property business into IOI Properties, with the plantation assets remaining under the parent company.
To recap, IOI Properties was set to be demerged from parent IOI Corp and return to the Main Market of Bursa Malaysia this year to become one of the biggest listed property companies in the country with total assets of RM15bil.
IOI Properties will distribute up to 2.162 billion shares on the basis of one IOI Properties share per three existing shares held in IOI Corp. The property firm will also offer up to 1.081 billion shares under a non-renounceable restricted offer for sale.
The non-renounceable offer for sale will be on the basis of one restricted offer share for every six existing IOI Corp shares held.