KUALA LUMPUR (March 10): Property developer LBS Bina Group Bhd has proposed a rights issue to raise up to RM165.6 million to fund its projects and general working capital requirements.
The cash call involves up to 150.6 million redeemable convertible preference shares (RCPS) on the basis of one RCPS for every five shares held.
In a filing with Bursa Malaysia yesterday, the group said that as at Feb 26, its share capital was RM720.3 million comprising 650.9 million shares.
It said that for illustration purposes, the indicative issue price of the RCPS is set at RM1.10 apiece, and the rights issue is expected to raise proceeds of up to RM165.66 million.
Based on the indicative issue price and the indicative conversion ratio set at one new share for every two RCPS, the indicative implied conversion price is RM2.20 for every new share.
This would represent about 15.2% premium to the five-day volume-weighted average market price of LBS shares up to Wednesday, of RM1.91.
LBS said that to meet the minimum subscription level, the group’s largest shareholder Gaterich Sdn Bhd and its owners Tan Sri Lim Hock San and Datuk Wira Lim Hock Guan have given their undertaking to subscribe in full for their respective entitlements.
As at Feb 26, Gaterich held a 45.32% direct stake in LBS, while Hock San and Hock Guan possessed 0.59% and 1.21% direct interests in the group respectively. Together, they would be able to raise RM67.46 million.
LBS said the proposals are expected to be completed by the third quarter of 2017.
LBS’s share price closed unchanged at RM1.96 yesterday, valuing the group at RM1.28 billion.
This article first appeared in The Edge Financial Daily, on March 10, 2017.