February 17, 2014 / 7:51 AM / in 4 years

Malaysia's Al-Hadharah delists ahead of plantation IPO

KUALA LUMPUR, Feb 17 (Reuters) - Al-Hadharah Boustead REIT , one of four Islamic real estate investment trusts on Malaysia’s stock exchange, will be delisted on Wednesday ahead of a bigger initial public offer of shares planned by its main shareholder.

Al-Hadharah, which manages 12 plantation assets worth 1.2 billion ringgit ($363 million), will delist after its units were thinly traded and the company found it difficult to maintain dividend yields.

Boustead Holdings offered to pay 2.10 ringgit per unit or $190 million for the 46.4 percent it did not own in Al-Hadharah.

Al-Hadharah had previously said mature plantation assets needed for growth were scarce and expensive, while its policy of distributing 90 percent of earnings as dividends meant that funds for investment were limited.

The delisting was a “good opportunity” for unit holders to exit at an attractive price, considering the limited growth prospects of the REIT, Hong Leong Investment Bank said in a circular last November.

Al-Hadharah was merged with Boustead Plantations. The company now manages 40 oil palm estates and 10 mills across Malaysia; Boustead Plantations’ IPO is expected in the second quarter of this year.

Axis Real Estate Investment Trust, Al-Aqar Healthcare REIT and KLCC Real Estate Investment Trust will be the remaining Islamic REITs on the local bourse.

$1 = 3.3052 Malaysian ringgit Reporting by Al-Zaquan Amer Hamzah; Editing by Andrew Torchia

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