EcoWorld entities part ways, key directors resign
KUALA LUMPUR: Eco World International Bhd has proposed to terminate the collaboration agreement it signed with Eco World Development Group Bhd (EcoWorld Malaysia) to explore property investment and development opportunities in Malaysia.
The agreement was signed between both parties in 2016 which imposed geographical restriction on property development or investments for both companies.
Under the agreement, EcoWorld International agreed to not undertake any property development or investments in Malaysia while EcoWorld Malaysia will not undertake any projects outside the country, except through EcoWorld International.
EcoWorld International said it has been exploring other avenues to pursue growth and address the market challenges faced in the United Kingdom (UK) and Australia, where it operates.
It noted that residential property market conditions in the UK and Australia have been challenging for new project launches since the onset of the Covid-19 pandemic.
"Whilst staying focused on cash-generation, EcoWorld International's board and management have been actively exploring other avenues to pursue growth, create long-term value for its shareholders and address market challenges. This includes exploring opportunities in jurisdictions outside the UK and Australia.
"In this regard, Malaysia is attractive given its stable economic outlook, promising prospects, more favourable accounting rules for revenue recognition from development activities as well as EcoWorld International management team's familiarity with the local real estate market," it said in a statement.
Following the termination of the collaboration, the company said the objective of the parties to adopt a common "EcoWorld" brand name as envisaged in the brand license agreement entered in 2014 will no longer subsist.
Accordingly, the brand license agreement will be terminated simultaneously with the termination of the collaboration agreement.
To avoid market confusion with EcoWorld Malaysia, EcoWorld International's name is proposed to be changed to EWI Capital Bhd once it enters the Malaysian market.
"The above proposals will be presented to EcoWorld International's shareholders for their approval at an extraordinary general meeting (EGM) to be convened. EcoWorld Malaysia will also be tabling the relevant proposals to its shareholders for approval at its own EGM," it said in a statement.
Meanwhile, to address potential conflict of interest, Tan Sri Liew Kee Sin and Datuk Heah Kok Boon have voluntarily resigned as directors of Eco World International effective today.
Liew is the executive chairman and Heah is an alternate director of EcoWorld Malaysia.
Accordingly, EcoWorld Malaysia will de-recognise its 29 per cent stake in Eco World as an associate company and instead, recognise it as a simple investment.
EcoWorld International president and chief executive officer said the company could explore development management services in Malaysia through EcoWorld Malaysia, as it does not have its own property development team in the country.
The company plans to monetise some of its long-gestation property assets over the next 18 to 24 months to raise proceeds for reinvestment.
"Combined with our zero gearing position and the gradual cash build-up from the sale of our remaining completed stocks, we are well-positioned to explore new investment or development opportunities.
"We believe that by expanding the geographical scope of our operations to include Malaysia, we will be able to chart a more agile and resilient path forward for the group," he said.
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