Mah Sing to raise RM630m via cash call

KUALA LUMPUR: Mah Sing Group Bhd aims to raise up to RM630 million in a capital raising exercise which will entail a renounceable rights issue with free warrants, to fund its future expansion, said its executive director Datuk Steven Ng.
“RM530 million will be for land development and the balance RM100 million will be used for working capital,” he told reporters at a briefing yesterday.
The exercise will be completed in the first quarter of 2015, followed by a one for every four share bonus issue to reward long term shareholders. The bonus issue is targeted for completion by the third quarter of 2015.
The group will finalise the entitlement basis and issue price after obtaining all the approvals for the exercise.
Ng said the issue price for the rights is expected to be at a discount of at least 20% to the theoretical ex-rights price based on the five-day volume weighted average market price of Mah Sing shares immediately preceding the price fixing date.
He said upon completion of the corporate exercise, the group will be able to borrow up to RM1 billion before its gearing level hits 0.5 times. The RM1 billion will be used to purchase new landbank.
Ng said its gearing level as of Sept 30, 2014 was 0.37 times and it makes a conscious effort to not exceed the 0.5 times level. Its cash pile as of Sept 30, 2014 stood at RM656.1 million.
Currently it has a total of 3,650 acres of land. Its unbilled sales of RM5.1 billion as of Sept 30, 2014 combined with the remaining gross development value (GDV) from their projects, land deals and MOU for new land, is estimated at RM66 billion.
For 2015, the group has planned at least six launches with a GDV of more than RM4 billion.
Its CEO Ng Chai Yong said the launches are in Johor, Seremban, Puchong, Rawang, Penang and Subang Bestari.
He said the Seremban and Subang Bestari projects will be launched in the second half of 2015 while the other four projects will be launched in the first half of 2015.
The group expects to maintain the same trend next year, whereby 84% of its products will be priced below RM1 million as part of its strategy to cater to the mass market.
For the nine months ended Sept 30, 2014, Mah Sing’s net profit improved 21.3% to RM254.7 million while revenue rose 43.6% to RM2.1 billion.
The higher profit was attributed to higher recognition of profit on Icon City in Petaling Jaya and M Residence@Rawang while the higher revenue was due to higher work progress from its ongoing projects.
The group achieved RM2.5 billion in terms of sales during the nine months and is working towards its full year sales target of RM3.6 billion.