MRCB targets foreign reign investors with RM2.86b rights issue
Company eyes bigger foreign shareholding with market cap expected to hit US$1b
MALAYSIAN Resources Corp Bhd (MRCB) hopes its RM2.86 billion rights issue will make it more attractive to investors.
MRCB shareholders approved the proposed rights issue at its extraordinary general meeting (EGM), here, yesterday.
“More than 89 per cent of shareholders voted in favour of the rights issue,” said chief corporate officer Amarjit Singh Chhina.
“From here, we will proceed with price-fixing in mid-August and submit the prospectus to the Securities Commission Malaysia for approval. We expect to complete this by end of September,” he said after the EGM.
Also present were chief operating officer Kwan Joon Hoe and chief financial officer Ann Wan Tee.
MRCB is undertaking a renounceable rights issue of up to 2.86 billion new shares together with free detachable warrants.
This is on the basis of one rights share for every existing MRCB share held and one free warrant for every five rights shares subscribed. This means that MRCB’s share capital would double and earnings per share would be diluted accordingly.
Amarjit said MRCB’s market capitalisation was expected to rise to US$1 billion (RM4.28 billion).
“Hopefully, this would spark interest and boost MRCB’s foreign shareholding, which currently is less than 10 per cent.”
He said at least a third of the proceeds worth RM975 million would be advanced to MRCB’s 85 per cent-owned unit Rakan Juang Sdn Bhd to upgrade facilities at the National Sports Complex in Bukit Jalil, here.
Phase 1 of the development (also known as Project 1) is being completed on time for the SEA Games next month.
Phase 2, which kicks off in January next year, involves the upgrading of the National Stadium and the design and construction of a sports complex, sports mall, convention centre, a multi-storey car park, hostels, sports museum, library, and youth park.
Ann said MRCB, which has a gearing of 0.9 times as at endMarch this year, plans to set aside RM826.32 million to pare down gearing to 0.7 times after the right issue.
He said the group would save RM46.69 million in annual gross interest based on the group’s weighted average effective interest rate for its borrowings of about 5.65 per cent per year last year.