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

New Straits Times - - Front Page -

RUPA DAMODARAN KUALA LUMPUR bt@me­di­aprima.com.my

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

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