ANY plans of WCT Holdings Bhd had of listing its assets under a real estate investment trust (REIT) in 2015 is still in limbo after first being delayed in Aug 2017.
The initial plan was to set up WCT REIT with a total RM1.1 bil worth of assets to be injected into the REIT, comprising Paradigm Mall in Petaling Jaya as well as AEON Mall and Premiere Hotel in Klang.
According to an Aug 29, 2017 report by The Star, the delay was due to land and tenancy matters, concluding that the stock lacks strong medium-term catalysts at the time.
Following that, The Edge Markets reported on June 6, 2018 that the planned listing may be deferred to 2019, pending the outcome of a legal dispute between WCT’s indirect wholly-owned subsidiary Gemilang Waras Sdn Bhd and Aeon Co (M) Bhd.
In another The Edge Markets report on Mar 5, 2019, it was said that the group was still planning to list its REIT in the second half of 2019, following the out-of-court settlement of the legal suit.
The report also mentioned that the REIT was then updated to include Paradigm Mall PJ, BBT Mall Klang, Premiere Hotel, New World Hotel and Ascent Office Tower, with an aggregate asset value of up to RM2 bil.
The listing was then expected to reduce the group’s debts by approximately RM300 million.
However, there have yet been any updates on whether WCT’s REIT listing was ever successful.
Meanwhile, a research report by Hong Leong Investment Bank Research (HLIB Research) on June 26, 2020, WCT faced a core loss of -RM16 mil in its first quarter ended Mar 31, 2020 (1Q20) against 1Q19’s core earnings of RM10.3 mil.
HLIB Research analyst Jeremy Goh believes that the weaker performance was due to lower contribution from all segments stemming from the movement control order (MCO) that was implemented in April 2020.
For its 2Q20, WCT reported a revenue decline of 16.6% to RM374.9 mil from RM450.1 mil in 2Q19 and a 67% decline in earnings to RM7.4 mil in 2Q20 from RM22.6 mil in 2Q19. – Sept 2, 2020
