IGB ... May12

It stands to rake in close to rm1 billion in cash as its 76% stake subsidiary KrisAssets plans to distribute cash proceeds from the planned disposal of its two retail properties to a REIT. KrisAssets plans to dispose of the Mid Valley and The Gardens Mall to IGB REIT for rm4.61 billion. The transaction will be satisfied by the issuance of 3.4 billion new units in IGB REIT at rm1 each while the balance of rm1.2 billion will be settled in cash, to be funded from the drawdown of a portion of syndicated financing facilities by the REIT.

The cash payout by KrisAssets will further expand IGB’s huge cash reserves. As at Dec 31, 2011, IGB had cash of rm821 million against debt obligations of rm1.1 billion. Including the potential cash distribution of rm965 million from KrisAssets, IGB’s cash pile is expected to grow to tm1.79 billion, placing its parent company at a net cash position of rm690 million.

However, IGB is exploring development opportunities in London and Taipei , whereby it is understood that IGB would require about rm1 billion to fund the acquisition of a site in London .