OCR proposes 226.1 million new warrants

KUALA LUMPUR: Construction and property developer OCR Group Bhd is proposing a bonus issue of up to 226.1 million new warrants (Warrant D) on an entitlement basis to be determined by the board.

Group managing director Billy Ong Kah Hoe said the proposed bonus issue of warrants would also provide shareholders the opportunity to increase their equity participation in OCR and allow them to further participate in the company's growth.

“The new warrants will also provide us with additional working capital without incurring interest expenses compared with bank borrowings. Hence, we see this corporate exercise as a win-win scenario for our shareholders and OCR,” he said in a statement yesterday.

Ong added that the company’s prospects remained sanguine in spite of the current soft property market condition.

“One of our projects, Isola@ KLCC, which has an estimated gross development value (GDV) of RM240mil, has received encouraging response with a take-up rate of 80%. We expect the project to contribute positively to our earnings in the current financial year,” he said.

OCR currently have eight projects, both existing and upcoming with a combined GDV of RM1.9bil.

The exercise price of the Warrant D would be determined and announced by the board at a later date and the board expected the proposed bonus issue of warrants to be completed by the first quarter of 2019, subject to the approval of Bursa Malaysia.

Based on an illustrative exercise price of the Warrant D of RM0.25, under the maximum scenario, a maximum gross proceeds of RM56.5mil would be raised while under the minimum scenario, a total of RM18.3mil would be raised.

“The amount raised shall be utilised for future working capital requirements of the group,” he said.