MAS TO FINALISE PLAN TO LEASE THIRD-PARTY AIRCRAFT IN 4 WEEKS
Bulk of proceeds will be used to fund refurbishment of National Sports Complex in Bukit Jalil
RUPA DAMODARAN KUALA LUMPUR firstname.lastname@example.org
MALAYSIAN Resources Corp Bhd (MRCB) is proposing a rights issue of shares and warrants of up to RM2.86 billion, with part of the proceeds to be used for development and construction projects.
The issuance will be on the basis of one rights share for each existing MRCB share and one free rights warrant for every five rights shares, it told Bursa Malaysia yesterday.
Its chief financial officer Ann Wan Tee said the issue price would be determined at a later date and based on a discount not less than 20 per cent.
MRCB’s major shareholders — the Employees Provident Fund (EPF) and Gapurna Sdn Bhd — have given their undertaking to subscribe in full to their entitlements under the proposal.
EPF and Gapurna have 33.55 and 16.78 per cent stakes, respectively, in the group, while Bank Kerjasama Rakyat Malaysia Bhd holds 7.92 per cent and Tabung Haji 8.12 per cent.
The rights issue would be looked on as a more tangible proposition for shareholders to consider since it involved development of land already acquired, said Ann.
“With the rights issue, the gearing can be reduced to 0.01 time, almost debt-free,” he said.
The exercise would enable MRCB to continue participating in property developments and construction projects and the proceeds raised would be used to pare down the group’s borrowings.
Assuming an indicative issue price of RM1 for the rights issue and an exercise price of RM1.60 for the warrants, Ann said the exercise would raise the group’s paid-up capital by RM2.17 billion in a minimum scenario, or RM2.86 billion in a maximum scenario.
But the maximum scenario is not achievable as the warrants are priced at RM2.30 each.
The bulk of proceeds, about RM975 million, would be used to finance the refurbishment of the National Sports Complex in Bukit Jalil, he added.
The rest of the fund will be used for other existing development and construction projects (RM233 million) and repayment of group borrowings (RM826.3 million).
MRCB is refurbishing the National Sports Complex for the 2017 SEA Games in August.
On the Eastern Dispersal Link project in Johor, Ann said MRCB was still keen to “clear it” but not at the expense of a “fire sale” to get rid of the debt.
MRCB chief financial officer Ann Wan Tee