Bina Puri to take controlling stake in resort developer

PETALING JAYA: Bina Puri Holdings Bhd plans to make Kuantan Waterfront Resort City (KWRC) project developer, Ideal Heights Properties Sdn Bhd an indirect subsidiary by buying out stakes of six shareholders through the issuance of new Bina Puri and redeemable preference shares (RPS), in a RM42.7 million related party transaction.
In a filing with Bursa Malaysia Securities today, Bina Puri said its subsidiary Bina Puri Properties Sdn Bhd and six vendors – Tan Sri Datuk Tee Hock Seng, Dr Tony Tan Cheng Kiat, Datuk Henry Tee Hock Hin, Datuk Matthew Tee Kai Woon, Tee Kai Soon and Syarikat Masyakin Sdn Bhd signed a conditional sale and purchase agreement today, for an additional 54.5% interest in the company. Bina Puri already owns a 12% stake.
Bina Puri plans to issue 95.1 million new ordinary shares at an issue price of RM0.2498 per share to satisfy RM23.8 million; a sum of RM10.1 million to be satisfied via the issuance of 40.4 million RPS at an issue price of RM0.2498 a piece and RM8.8 million via the issuance of up to 35.3 million RPS at an issue price of RM0.2498 a piece.
IHP is the developer of a 500 acre saleable land, a majority of which is subject to further reclamation situated off Jalan Kuantan-Tanjung Lumpur in Kuantan.
Bina Puri said the KWRC project which comprises a mixed development for commercial and residential use with a development period of at least 17 years, is in line with its long term strategic plan to expand its property development business and is expected to enhance the income from its property development operations.
Bina Puri said its part new shares and new redeemable preference shares deal allows the group to conserve some cash reserves as well as to avoid incurring additional interest expenses on borrowings, as opposed to being settled entirely in cash and/or bank borrowings and minimises further dilution effect on the earnings per share of Bina Puri, which would otherwise arise from the issuance of just new Bina Puri shares.