MRCB proposes to raise up to RM612.1 million from private placement

PETALING JAYA: Malaysian Resources Corp Bhd (MRCB) proposes to raise up to RM612.1 million from a private placement, which will be used mainly for its property development activities.
In a filing with Bursa Malaysia yesterday, MRCB said it proposes to undertake a private placement of up to 493.61 million ordinary shares of RM1 each, representing up to 20% of its issued and paid-up share capital.
“Based on the indicative issue price of RM1.24 per placement share, the company is expected to raise gross proceeds of up to RM443.1 million and RM612.1 million under the minimum scenario and maximum scenario respectively upon completion of the proposed private placement,” it said.
Under the maximum scenario, RM371.5 million will be used for property development, RM85 million for repayment of borrowings and RM142.777 million as general working capital while the remaining RM12.8 million will be for the estimated expenses in relation to the exercise.
Last month, MRCB announced three major deals namely the RM1.63 billion job to refurbish and upgrade the Bukit Jalil National Sports Complex, a joint venture with Cyberview Sdn Bhd to develop Cyberjaya City Centre and a RM3.1 billion contract to develop Kwasa Utama.
The group’s borrowings as at June 30, 2015 amounted to RM3.14 billion. The repayment of the borrowings is expected to result in an annual gross interest savings of RM3.32 million and RM4.34 million under the minimum and maximum scenarios respectively.
Gapurna Sdn Bhd, a major shareholder of MRCB, has undertaken to subscribe for 60 million placement shares. It also intends to subscribe for a further 60 million placement shares, subject to the actual timing of implementation of the proposed private placement, the actual issue price of the placement shares, its cashflows and/or availability of external financing.
Besides Gapurna, the placement shares are to be placed out to independent third party investor(s) to be identified later.
The exercise is expected to be completed by the second quarter of 2016.