Sentoria proposes share consolidation, bonds issue to raise up to RM150 mil

• The proposed share consolidation is expected to be completed by the second quarter of 2024.

KUALA LUMPUR (Jan 18): Sentoria Group Bhd plans to raise up to RM150 million — more than three times its market capitalisation of RM40 million — from a redeemable convertible bonds issue to repay loans and finance property developments.

In a bourse filing on Thursday, the property developer and resort operator also proposed a consolidation of every four existing shares of the group into one share.

As at Jan 12, Sentoria’s issued capital stood at RM164.97 million comprising 622.98 million shares. In addition, the group has an outstanding 205.87 million warrants B.

Upon completion of the share consolidation, the group's issued share capital will be 155.74  million shares under the minimum scenario, or 207.21 million shares under the maximum scenario, assuming full exercise of warrants B.

Sentoria said it had entered into a conditional subscription agreement with the subscriber of the redeemable convertible bonds, Triton Capital Fund VCC, to provide funding solutions to companies that facilitate working capital requirements, business expansion, mergers and acquisitions.

The redeemable bonds come with an interest rate of 1% per annum and will be fully issued in three tranches over the next three years.

Sentoria said the number of shares to be issued upon conversion of the bonds will depend on the conversion price, which will be determined at a later juncture provided the conversion price is not less than 20 sen per share. 

Assuming the bonds are converted at the illustrative conversion price of about 48.91 sen, and taking into consideration the maximum conversion shares of 306.69 million shares, it is expected to raise gross proceeds of RM150 million.

Of the proceeds, RM50 million will be utilised for repayment of borrowings and RM46.92 million for required working capital needs, the group said.

Another RM32.2 million will be used to fund its development of warehouses and RM11 million to fund the Morib Bay Resort City. The remaining RM9.89 million will be used to pay for expenses related to the proposals. 

Sentoria’s borrowings total RM428.2 million, comprising non-current borrowings of RM422 million, and current borrowings of RM6.2 million.   

The proposed share consolidation is expected to be completed by the second quarter of 2024.

Sentoria has been in the red over the past four years. It incurred a loss after tax of RM97.12 million for the financial year ended March 31, 2022 (FY2022), after posting a loss after tax of RM170.19 million in FY2021 and RM88.63 million in the 18 months of FY2020.

It incurred a net loss of RM60.87 million for its 18-month period ended Sept 30, 2023 on the back of revenue of RM47.09 million. The group had in April 2023 changed its financial year to Sept 30 and as such there is no comparative year-on-year figure for FY2023. 

Sentoria's share price closed down one sen or 13.33% at 6.5 sen, bringing the group a market capitalisation of RM40 million. Compared to its recent peak of 11 sen on Dec 12, the stock has fallen 41%.

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