UEM Land to raise RM970mil via rights issue

Posted on | January 12, 2010

By THE STAR


KUALA LUMPUR: UEM Land Holdings Bhd has proposed to raise about RM970mil via a rights issue to repay its borrowings, pay for the acquisition of land in Cyberjaya and for property development and working capital purposes.

In a filing with Bursa Malaysia yesterday, UEM Land said the issue price for the rights shares was expected to be fixed at a discount of at least 30% to the theoretical ex-rights price of its shares immediately before the price fixing date which would be determined and announced in due course.

UEM Land intends to utilise RM633mil from the gross proceeds to repay a term loan owed by wholly-owned unit Bandar Nusajaya Development Sdn Bhd and RM266.2mil for property development.

Managing director and chief executive officer Wan Abdullah Wan Ibrahim said the proposed rights issue would allow the company to raise funds to repay its borrowings and reduce its interest cost which would lead to a more robust capital structure.

Wan Abdullah Wan Ibrahim says the rights issue will allow the company to repay its borrowings

“The inflow of capital for our property development activities will accelerate the realisation of value from our Nusajaya land bank and spur UEM Land’s future earnings growth,” he said, adding that the company had a number of property projects in the pipeline.

“We are also optimistic that for 2010, the overall property market in Malaysia will outperform 2009 – particularly for Johor where we expect a lot of excitement arising from the successful implementation of Iskandar Malaysia’s initiatives and the spillover demand from Singapore with the recovery of Singapore’s property market and the opening of the Marina Bay Sands and Resorts World Sentosa,” Wan Abdullah said.

Subject to all approvals being obtained, the proposed rights issue is expected to be completed by April 30.

In line with its confidence in and continuing support of UEM Land, UEM Group Bhd (a major shareholder of UEM Land) has provided its irrevocable written undertaking to subscribe in full or procure the subscription in full of its entitlement under the proposed rights issue

As at Dec 31, UEM Group held directly 1.87 billion UEM Land shares, representing 77.14% equity interest. Pursuant to the UEM Group undertaking, UEM Group’s minimum subscription amount will be about RM748.2mil.

- Malaysia Property News dot net

You might also like

MK Land plans RM150m rights issue By BUSINESS TIMESPROPERTY developer MK Land Holdings Bhd plans to raise some RM150 million from a rights...

UEM Land to raise RM970m via rights By BUSINESS TIMESUEM Land Holdings Bhd has proposed a rights issue to raise some RM970 million, a bulk...

S’pore Starhill REIT rights issue to raise S$337m By REUTERSSINGAPORE: Singapore's Starhill Global Real Estate Investment Trust yesterday proposed a rights...

MRCB using RM541mil rights proceeds to buy land By THE STARKUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB), which has proposed a RM541mil fund-raising...