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KUALA LUMPUR (Feb 18): Seal Inc Bhd (KL:SEAL) is relinquishing control over its 31.50-acre reclamation project in Penang to a unit of Penang property developer GSD Land (M) Sdn Bhd to reduce financial risk and funding pressure during the project’s long gestation period.
New project investor, Titanium Greenview Sdn Bhd, is set to have an 82.34% stake in the project vehicle, Mutiara Waterfronts Habitats Sdn Bhd, while Seal’s Daiman Majumas Sdn Bhd’s stake will fall to 17.66% from 80%, according to a bourse filing on Monday (Feb 16).
Titanium Greenview is wholly-owned by GSD Land, which is 70% owned by Datuk Seri Khor Chong Hai, 20% by Khor Chong Guan and 10% by Khoek Su Kiang.
Seal Group, involved in property investment, development, management, construction and timber, has seen fluctuating revenue over the past five years due to Covid-19, global economic uncertainties and geopolitical tensions. Property development and investment contributed 43%–97% of revenue during this period.
To address inconsistent performance and long timelines for its reclamation project, Seal diversified into renewable energy in 2024 via an investment in MSR Green Energy Sdn Bhd, it said in the filing with the bourse.
The proposed collaboration allows Seal to reduce its financial and resource commitments in Mutiara Waterfronts and the reclamation project while retaining a minority 17.66% stake. The new partner, Titanium Greenview, will take on future funding obligations as the controlling shareholder.
Seal will also gain full ownership of 3.03 acres of net developable land upon completion of the reclamation project from the existing shareholders’ entitlement, benefiting from the land’s future value. Mutiara Waterfronts will no longer be consolidated in Seal’s financial statements, reducing financial risk.
The board of Seal views the collaboration as a strategic move to revive the reclamation project, lower financial exposure and free up resources for higher-growth areas.
The reclamation project involves about 31.5 acres in Bayan Mutiara, Penang. Upon completion, Mutiara Waterfronts is entitled to 40% of net developable land (9.15 acres), which increased to 17.156 acres after an additional 8.006-acre offer from Penang Development Corporation (PDC).
A conditional subscription cum shareholders agreement will see Titanium Greenview subscribe to 9.325 million new shares in Mutiara Waterfronts at RM1 apiece or a total of RM9.325 million. Earlier, Daiman Majumas had signed a share sale agreement with Biopolis Group Sdn Bhd to take over its entire 20% stake or 400,000 existing shares in Mutiara Waterfronts for RM15 million.
After both deals are completed, Titanium Greenview will have an 82.34% stake in Mutiara Waterfronts while Daiman Majumas’ interest will be diluted to 17.66%.
Upon completion of the reclamation project, Titanium Greenview’s entitled developer land will be 14.126 acres while Daiman Majumas’ will be 3.03 acres, according to Seal.
Part of Titanium Greenview’s subscription consideration, RM9.02 million, will go towards full settlement of all outstanding sums owed by Mutiara Waterfronts to Seal, to which Seal shall partially redeem an equal sum of its redeemable preference shares (RPS) in Mutiara Waterfronts.
Seal, which owns 29.797 million RPS in Mutiara Waterfronts, noted it will also undertake to redeem all remaining RPS simultaneously without claiming any consideration, entitlements, profits, sums, interests, prices and/or dividends from Mutiara Waterfronts and/or Titanium Greenview.
While shareholders’ approval is not required under listing requirements, Seal, on a voluntary basis, will seek their nod for the deal with Titanium Greenview at an extraordinary general meeting to be held.
The subscription by Titanium Greenview and Daiman Majumas’ buying out Biopolis’ stake in Mutiara Waterfronts are not interconditional, it noted.
The collaboration is expected to become effective by the second quarter of 2026, Seal noted.
Shares in Seal ended one sen or 1.59% lower at 62 sen, valuing the company at RM278.88 million.
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