JKG Land plans 2 for 1 rights shares to raise up to RM151.7 mil to fund property projects

KUALA LUMPUR (Dec 15): Property developer JKG Land Bhd proposes a rights issue of 1.5 billion shares on the basis of two rights shares for one share to raise RM151.7 million for its property development projects and expansion plans.

In a filing with Bursa Malaysia, JKG said it would also repay RM25 million of its short-term bank borowings and utilise RM10.7 million as working capital.

To accommodate the rights issue, it proposes to increase its authorised share capital from RM100 million of one billion shares to RM500 million comprising five billion shares

JKG said the proposed rights issue is renounceable in full or in part, and will be issued on an entitlement date and at issue price determined and announced later.

The issue price is expected to be at up to 40% discount to the theoretical ex-rights price (TERP) of the shares immediately preceding the price-fixing date but would not be lower than the par value of JKG shares of 10 sen.

For illustrative purposes, should the rights shares be issued at 10 sen per share, it would represent a discount of 23.1% to the TERP of JKG shares of approximately 13 sen, based on the five-day volume weighted average market price of 19 sen up to and including Dec 15, 2016 being the last practicable date.

About RM115 million, which would be used for property development projects and expansion plans, would part finance the Era @ Duta North Kuala Lumpur project, which has a gross development value of RM2.2 billion.

“The group also intends to have funds readily available to take advantage of opportunities for future property development projects and acquisition of landbank to further develop and grow its property development business,” it said.

Its total borrowings as at Dec 15 amounts to RM160.4 million, JKG said, adding that the repayment would result in interest savings of RM1.2 million.

The proposals are expected to be completed in the first quarter of 2017.

JKG closed unchanged at 18.5 sen for a market capitalisation of RM140.3 million. -- theedgemarkets.com