Co-Prosperity increases stake in Yong Tai to 31.34%

PETALING JAYA (Aug 2): Tourism and cultural property developer Yong Tai Bhd has seen its major shareholder Co-Prosperity Holdings Ltd increase its stake in the former via a private placement exercise ahead of the Impression Melaka theatre’s scheduled opening in February 2018.

Co-Prosperity is a listed company on the Hong Kong Stock Exchange.

The corporate exercise will see Co-Prosperity’s wholly-owned subsidiary Full Winning Developments Ltd (FWDL) subscribe 43 million new shares of Yong Tai at RM1.26 per placement share, said Yong Tai in a statement today.

“Co-Prosperity, via FWDL, will have a bigger stake in Yong Tai, which is expected to record stronger revenue and earnings growth as it undertakes more strategic property development projects in Melaka and Kuala Lumpur,” said Yong Tai.

As a result of the subscription of shares, FWDL will hold 31.34% voting shares in Yong Tai. Prior to the corporate exercise, FWDL owns 107 million shares or 24.56% of the issued share capital of Yong Tai.

From the new share placement, Yong Tai will raise RM54.18 million, enabling it to partly finance the purchase of a 1.08-acre land in Bukit Bintang, Kuala Lumpur. The developer has entered into a Conditional Share Subscription Agreement (SSA) with FWDL in relation to the corporate exercise today.

Barring unforeseen circumstances, the corporate exercise is expected to be completed by 4Q2017.

The indicative price of RM1.26 a share represents a 10% discount to the five-day weighted average market price of Yong Tai’s shares immediately preceding the date of the SSA.

Yong Tai group chief executive officer Datuk Wira Boo Kuang Loon said the decision to increase its equity participation in Yong Tai demonstrates Co-Prosperity’s commitment and confidence in the developer’s business direction.

“The decision is also in line with Co-Prosperity’s business plan to expedite its development and diversification into the media, cultural and entertainment business as Yong Tai Group is involved in tourism and cultural-related developments,” he said.

Yong Tai added that the corporate exercise would further strengthen the net assets as well as the financial position of the developer and enable it to raise additional funds without incurring high borrowing cost.

The proposed private placement is subject to the approval of relevant authorities and the shareholders of Yong Tai at an extraordinary general meeting.

Yong Tai had also announced the termination of a Memorandum of Understanding with Terrawest Resources Sdn Bhd for the proposed acquisition of 1.5 acres of land in Puchong to focus on the development within the Impression City project, especially the Impression Melaka theatre.

Yong Tai’s existing property projects are located within the heritage city of Melaka. Leveraging on the city’s status as a Unesco World Heritage Site, Yong Tai is developing the RM7 billion Impression City in Kota Laksamana.

The landmark project will be developed in stages on a 138-acre site. Nestled within the development is the Straits of Melaka-fronting Impression Melaka, a 2,000-seater indoor theatre that will showcase large-scale live cultural music performances. It is a franchise of the Impression Series in China.

Last month, Yong Tai launched a condominium-hotel called The Dawn at Impression City. It is the first series of hotels in Impression City.