Albedo in S$774m reverse takeover

Published: 4:02 AM, September 21, 2013
Updated: 12:50 AM, September 23, 2013

SINGAPORE — Singapore-listed steel trading firm Albedo has agreed to a S$774 million reverse takeover by a company controlled by Malaysian businessman Danny Tan in a deal that will see Albedo join international property developers buying up land in Malaysia’s Iskandar region.

It is seeking to expand its business into property development as it expects the group’s existing trading businesses to remain challenging as increasing competition and weaker demand for its steel-related raw materials erode its profit margins, the company said.

Albedo plans to issue 34.55 billion new shares at 2.24 Singapore cents per share to Mr Tan’s Infinite Rewards, equal to about 95 per cent of the enlarged issued capital of Albedo.

Albedo will use proceeds to buy Reflections Oasis, a subsidiary of Infinite Rewards which is in the process of acquiring seven parcels of land in Malaysia for commercial, industrial and residential development.

Based on an estimate by Knight Frank Malaysia, the aggregate market value of the land is about RM2.71 billion (S$1 billion) as of Aug 30.

The companies are in negotiations to purchase an additional two plots, Albedo said.

“Albedo believes the strong track record, business network and experience of Tan Sri Dato’ Danny Tan and his business associates, combined with the development potential of the properties, will provide the group with the platform, synergy and scale it needs to transform into a major property developer in Iskandar,” it said.