KUALA LUMPUR: IOI Corporation Bhd has proposed to demerge its property and related businesses and subsidiaries into IOI Properties Sdn Bhd, to be known as the listing company (ListCo).

IOI Corp said on Tuesday the corporate exercise would then see it disposing its entire stake in IOI Properties Bhd to ListCo for RM9.768bil in exchange for 2.189 billion new RM1 shares in the ListCo.

The plantation giant would subsequently dispose of other subsidiaries involved in property development to the ListCo for RM2.629bil in exchange for 589.268 million new ListCo Shares.

IOI Corp would also dispose of 500 acres of agriculture land in Rompin in Negeri Sembilan, which will be converted to commercial/residential use, and 1,279 acres of land in Segamat to the ListCo for RM276mil for 61.89 million new shares.

It said the ListCo would acquire a 10% stake in Property Village Bhd from Summervest Sdn Bhd (a company controlled by Tan Sri Lee Shin Cheng, a major shareholder of IOI Corp). ListCo would acquire a 10% stake in Property Skyline Sdn Bhd from Summervest for RM196.34mil in exchange for up to 43.997 million new ListCo shares.

IOI Corp also said the corporate exercise would involve IOI Corp distributing up to 2.162 billion ListCo shares to entitled shareholders after the exercise. This would be on the basis of one ListCo share for every three shares held in IOI Corp, or about 66% of the enlarged ListCo shares.

The exercise would also involve a non-renounceable restricted offer for sale of all of the remaining ListCo shares to be held by IOI Corp after the proposed distribution amounting up to 1.081 billion ListCo Shares to the entitled shareholders of IOI Corp.

This would be on the basis of one ListCo share for every six IOI Corp Shares at an offer price to be determined later, comprising 33% of the enlarged ListCo shares.

IOI Corp said the proposed demerger was expected to result in greater visibility on separate performance of IOI Corp group's plantation business and ListCo's property related business, "enabling the capital market and shareholders to better ascertain the respective merits and prospects of two distinct businesses".

"In addition, the proposed demerger will allow IOI Corp to unlock its shareholders value and enable IOIC to reward its existing shareholders by providing them with an opportunity to directly participate in the ownership of, and enjoy returns from shares held in two separately listed companies on the Main Market of Bursa Securities," the company said.