NCT Alliance ups private placement size to raise RM65 mil

• The property developer will now place up to 181 million new shares at a lower illustrative price of 36 sen per share to raise RM65.16 million, according to its filing with Bursa Malaysia.

KUALA LUMPUR (Oct 25): NCT Alliance Bhd has increased the size of its private placement to 15% of total issued shares from 10% proposed less than one month ago, to raise a higher sum of up to RM65.16 million, from up to RM48.37 million previously.

The property developer will now place up to 181 million new shares at a lower illustrative price of 36 sen per share to raise RM65.16 million, according to its filing with Bursa Malaysia.

Of the gross proceeds, RM62 million will be allocated for its property development activities, while RM2.67 million will be allocated for general working capital, it said.

To recap, on Oct 7, NCT said the proposed private placement entailed the issuance of up to 120.93 million new shares, representing 10% of total issued shares, to person(s) to be identified at a later date at an illustrative price of 40 sen per share, to raise between RM42.59 million and RM48.37 million.

At the closing bell on Tuesday (Oct 25), NCT's share price slipped 3.9% or 1.5 sen to 37 sen, valuing the group at RM392.06 million. The counter's shares have fallen 28.85% since the beginning of this year.

NCT previously undertook a private placement of 150 million new shares, which was completed on Dec 8, 2021, and raised RM69.06 million primarily for its mixed development project in Genting Highlands, Pahang. The proceeds raised from the private placement have been fully utilised.

The group's issued share capital was RM269.52 million comprising 1.06 billion shares as of Oct 13.

Commenting on the rationale of the revised placement, NCT said it estimates that it will require RM504.3 million for its property development activities up to 2026.

"In this respect, a total of RM42 million is expected to be incurred in the next 12 months for the group's Acacia Residences project and Grand Ion Majestic project, both of which are in their advanced stage of development, whilst RM20 million is expected to be incurred for the group's upcoming Ion Vivace Project, which is expected to be launched in March 2023.

"Accordingly, the enlarged potential proceeds raised from the proposed revised placement will provide a timely boost to NCT in undertaking its aforementioned property development activities," said NCT.

Following NCT's property venture in recent years, the group posted record net profit for the financial year ended Dec 31, 2021 (FY21) of RM34.55 million on revenue of RM210.6 million. Its earnings per share (EPS) of 5.75 sen were the highest since FY11, when it booked 6.02 sen EPS on net profit of RM9.21 million that year.

In the first half ended June 30, 2022 (1HFY22), NCT's net profit more than doubled to RM19.12 million from RM9.56 million, as revenue rose 54.97% to RM100.28 million, from RM64.71 million. 1HFY22 EPS rose to 2.11 sen, from 1.74 sen.