Magma Group Bhd (KL) has announced a key acquisition that strengthens its foothold in the Kuala Lumpur property market. The hospitality and property development firm is purchasing a 2.26-acre plot of land in the Persiaran Dutamas area for RM80 million, with plans to develop serviced apartments and commercial spaces. Notably, former national badminton icon Lee Chong Wei will emerge as a significant shareholder following the deal.
Lee Chong Wei’s Role in the Acquisition
The transaction involves Magma Kiara Sdn Bhd, a subsidiary of Magma Group, and Skyload Express Sdn Bhd, a company where Lee Chong Wei holds a 45% stake. Datuk Seri Lee Hock Seng, the executive chairman of Magma, controls 44% of Skyload. With this acquisition, Lee Chong Wei will become a substantial shareholder in Magma, acquiring an indirect 11.89% stake in the company, in addition to his direct 2.48% share. His wife, Datin Wong Mew Choo, is also connected to the transaction through Skyload.
This acquisition marks Lee Chong Wei’s growing involvement in the Malaysian property market, particularly in one of Kuala Lumpur’s prime locations, Persiaran Dutamas. The land, earmarked for mixed-use development, will feature residential and commercial spaces, offering high-end serviced apartments to meet the growing demand in the area.
Funding the Acquisition
Magma will fund the RM80 million purchase through a combination of cash and the issuance of new shares. The company will use RM8 million in cash while issuing 120 million new ordinary shares at 20.24 sen each and redeemable non-convertible preference shares (RPS) to cover the remainder. The RPS will be priced at RM1 per share, which aligns with the outstanding RM47.71 million of the purchase consideration.
Upon completion of the acquisition, Lee Chong Wei will hold a 14.37% stake in Magma through his direct and indirect shareholdings. Meanwhile, Hock Seng’s shareholding will increase to 28.35%, further solidifying his leadership in Magma.
Strengthening Magma’s Property Pipeline
The acquisition is part of Magma’s broader strategy to strengthen its property development portfolio in Kuala Lumpur. The Persiaran Dutamas location is highly sought after for residential and commercial developments, offering the company a significant opportunity to cater to the growing demand for high-quality living spaces in the capital.
In a statement, Datuk Seri Thomas Liang Chee Fong, Magma’s managing director, highlighted the significance of the acquisition for the company’s growth. “Acquiring the Dutamas land enhances our property development pipeline and contributes to our long-term growth strategy. This is a key milestone in our efforts to expand our presence in premium locations,” Liang said.
Capital Reduction to Improve Financial Standing
Alongside the acquisition, Magma plans a capital reduction of RM379.21 million, aimed at offsetting accumulated losses and improving the company’s balance sheet. This move will require court approval following shareholder approval at an upcoming extraordinary general meeting (EGM).
“The proposed capital reduction will reset our financial foundation, enabling Magma to pursue future growth with greater strength,” Liang added.
Lee Chong Wei’s Increasing Business Influence
This deal underscores Lee Chong Wei’s expanding role in Malaysia’s business and property sectors. His involvement in this major Kuala Lumpur development adds another dimension to his growing business portfolio, further solidifying his influence beyond sports.
The development in Persiaran Dutamas, already a well-established area, promises to be a valuable addition to Kuala Lumpur’s property market, with high demand expected for the premium serviced apartments and commercial spaces planned for the site.
Positive Market Impact
Magma Group’s shares remained steady, closing at 20.5 sen on Tuesday, with a market capitalization of RM194.3 million. With Lee Chong Wei now a key shareholder, and the company’s property projects gaining momentum, Magma is poised for further growth in both the property development and hospitality sectors.
As the development progresses, both Magma Group and Lee Chong Wei will play pivotal roles in shaping this high-value project, contributing to the long-term growth of Malaysia’s property market.
