The new controlling shareholder of construction firm Putrajaya Perdana Bhd (PPB) has bold plans for the company.

"It is our aim to generate no less than US$1billion [RM3.4 billion] in new businesses for PPB from Abu Dhabi, Kuwait and Malaysia in the near term," says Yousif Mana Al Otaiba, director of international affairs at the Abu Dhabi Crown Prince's Court, in an emailed reply to The Edge.
Yousif is one of the shareholders in Abu Dhabi-Kuwait-Malaysia Investment Corp (ADKM Investment), which controls a 51% stake in Swan Symphony Sdn Bhd (Australian-based Autron Investment Co Ltd owns the remaining 49% of Swan Symphony).

Swan Symphony, led by Yousif and associates, is acquiring a 50.6% stake in PPB from Eastern & Oriental Bhd for RM199 million or RM2.90 a share. The exercise will trigger a mandatory general offer for the remaining PPB shares not owned by Swan Symphony, but Yousif says the intention is to keep PPB listed.

"We want to keep it listed. This is to continue to maintain the current level of transparency and corporate governance. More importantly, we want to offer the opportunity for other investors to ride the upside with PPB," he says.

PPB's current construction order book stands at about RM2.2 billion, according to Yousif. He says Swan Symphony would like to play the role of an active investor in PPB.

"We believe that the influence of Swan Symphony's shareholders, along with the strong execution abilities of PPB management, will put PPB in a pole position to take on any projects or contracts that will emerge from the Iskandar Development Region (IDR) and other economic zones in the near future."

The agreement that PPB has recently entered with Aldar Properties PJSC of Abu Dhabi relating to the development of the IDR project has set the stage for further cooperation, which could include PPB undertaking projects in Abu Dhabi. The cooperation between Aldar and PPB could also be used as a template for investments and projects in other countries, says Yousif.

Aldar, which is the master developer for 2,230 acres in IDR known as Node 1, owns over 34 million sq m of land at strategic locations throughout Abu Dhabi, with development projects worth more than US$60 billion.

Thus, Swan Symphony will tap its vast network in the Middle East to bring PPB into these markets and not just focus on Malaysia.

"With the backing of influential Middle Eastern investors in Swan Symphony, we will seek to promote PPB as the vehicle of choice for Middle Eastern and other investors who are keen to participate in the exciting growth opportunities in Abu Dhabi, Kuwait, Malaysia and other countries," adds Yousif.

The entry of Swan Symphony into PPB will transform the company from its current form as a pure construction outfit.

"It is the common goal of PPB management and Swan Symphony to move PPB up the real estate value chain and venture into property development (either by itself or through joint ventures with blue-chip partners), and continue to expand in the area of energy efficiency buildings with an initial focus on Abu Dhabi, Kuwait and Malaysia," says Yousif.

With the backing of strong shareholders, PPB will be able to take on massive landmark projects that might have seemed daunting previously.

"Swan Symphony is backed by a group of prominent investors with ready access to capital. Besides financial muscle, we will generate significant deals in Malaysia and Middle East for PPB. The size and structure of capital necessary for undertaking future landmark projects will be jointly determined by the management, board of directors and shareholders of PPB. Swan Symphony's shareholders are ready to support the growth of PPB and elevate PPB to the next level," says Yousif.

On why Swan Symphony has chosen PPB as the vehicle to enter Malaysia and potentially become the springboard to the Middle East, Yousif says: "I think the question should be: Why Malaysia? Malaysia has a special place in the eyes of Middle East investors, given our cultural and trading links established over centuries.

In the past few years, there has been a reallocation of Middle East liquidity to Asia from traditional markets such as Europe and the US. The shareholders of Swan Symphony have also been a part of this trend, and we identified Malaysia as the focal point of our investments in Asia."

"We believe that the macro-economic fundamentals of Malaysia are solid and are also impressed with some of the development projects announced by the government. These projects will generate significant businesses and opportunities in the medium and long term."

"Having picked Malaysia, our next goal was to identify solid, well-run emerging companies with proven track record to help us tap the economic growth of Malaysia and the Middle East.

"We have researched deeply into PPB and concluded that it scores strongly in all categories. Also, we believe that it can achieve even greater success with the business contacts of Swan Symphony shareholders," he says.

Article post on 1 Oct'07
By The EDGE (