EPF says it voted in favour of S P Setia's proposed rights issue

• About 261 shareholders representing 99.884% or 3.45 billion shares voted in favour of it, while 12 shareholders representing 0.116% or 4.01 million shares voted against it.  

KUALA LUMPUR (Oct 25): S P Setia Bhd’s substantial shareholder, the Employees Provident Fund (EPF), voted last Tuesday (Oct 18) in favour of the group’s proposed resolution to undertake a cash call to raise RM1.04 billion.

The cash call via a renounceable rights issue of new class C Islamic redeemable convertible preference shares (RCPS-i C) was a proposed resolution at the group’s extraordinary general meeting (EGM) last Tuesday, EPF said in a voting decision notice published on its website.  

EPF holds a 5.51% stake or 224.55 million shares in S P Setia as at Oct 6, 2022, according to an Oct 11 filing with Bursa Malaysia.

In a separate bourse filing on Oct 18, S P Setia said 258 shareholders representing 99.8655% or 3.45 billion shares voted in favour of the group’s RCPS-i C, while 15 shareholders representing 0.1345% or 4.65 million shares voted against the resolution.

To facilitate the implementation of the proposed rights issue, S P Setia has also proposed to amend the constitution of the company. About 261 shareholders representing 99.884% or 3.45 billion shares voted in favour of it, while 12 shareholders representing 0.116% or 4.01 million shares voted against it.  

The property developer said on Oct 18 that it had fixed the issue price of its right issue of up to 3.07 billion RCPS-i C at 38 sen each, and that this would raise gross proceeds of up to RM1.04 billion.

“The entitlement basis for the rights issue has been fixed at 67 RCPS-i C for every 100 existing shares held as at 5.00pm on Nov 2, 2022; and the conversion ratio for the RCPS-i C has been fixed at 32 new shares for every 67 RCPS-i C held,” it said. The right issue’s ex-date is Nov 1, 2022.

S P Setia said the issue price of 38 sen per RCPS-i C represents a discount of approximately 28.02% to the five-day volume-weighted average price (VWAP) of the group’s shares up to and including Oct 17, 2022, being the market day immediately preceding the price-fixing date of the rights issue on Oct 18, 2022, of 52.79 sen.

“Based on the issue price and conversion ratio, the implied conversion price for the RCPS-i C (i.e. RM0.38 × 67/32) is approximately RM0.7956 for every new share (implied conversion price),” it said.

It added that the implied conversion price represents a premium of approximately 34.21% over the theoretical ex-rights price (TERP) of the shares of 59.28 sen, based on the five-day VWAMP of the shares immediately preceding the price-fixing date.

In April, the group had announced the rights issue and its intention to use the gross proceeds raised from the latest proposed exercise to redeem all outstanding RCPS-i B which were issued in December 2017 and to repay borrowings.

As of April 8, 2022, it had 1.18 billion RCPS-i B, amounting to RM1.04 billion.

The RCPS-i B were issued pursuant to the company’s rights issue exercise undertaken in 2017, which raised gross proceeds of RM2.13 billion that have been fully utilised to finance the acquisition of I&P Group Sdn Bhd, property development costs of new and ongoing projects of the enlarged group and for working capital.

In order to meet the minimum subscription level for the latest rights issue, the company has already procured an irrevocable written undertaking from Permodalan Nasional Bhd (PNB), which owns 26.06%, and AmanahRaya Trustees Bhd (24.77%) — both major shareholders — to subscribe in full for their entitlement under the proposed rights issue.