OCR Group plans RM27m private placement to fund development projects

• The RM26.97 million proceed estimate is based on an indicative price of 6.81 sen apiece, which represents a discount of 19.98% to the five-day volume-weighted average price up to and including March 13 of 8.51 sen.
• OCR Group has earmarked RM25.92 million for the funding of existing and future property development projects, while the remaining RM1.05 million is allocated for the estimated expenses for the private placement.

KUALA LUMPUR (April 7): Property developer OCR Group Bhd has planned a private placement of up to 40% of its share base to raise an estimated RM26.97 million to fund its development projects.

According to OCR Group’s local bourse filing with Bursa Malaysia on Thursday (April 6), the exercise comprises the issuance of up to 396 million shares — based on its share base of 990 million shares — to independent third parties to be identified at an issue price to be determined later.

The RM26.97 million proceed estimate is based on an indicative price of 6.81 sen apiece, which represents a discount of 19.98% to the five-day volume-weighted average price up to and including March 13 of 8.51 sen.

OCR Group has earmarked RM25.92 million for the funding of existing and future property development projects, while the remaining RM1.05 million is allocated for the estimated expenses for the private placement.

According to the group, it currently has four active development projects — residential high-rise developments Isola KLCC and The Mate in Petaling Jaya, mixed-development Vertex in the Kuantan city centre, and commercial development Kyra in Shah Alam — with a cumulative gross development value of RM1.56 billion.

It continued that as at March 13, Isola was at 53% completion and expected to be completed by the first quarter of 2024 (1Q2024), followed by The Mate at 30% and estimated to be done by 3Q2023. Meanwhile, construction of Vertex and Kyra has yet to commence.

Kenanga Investment Bank Bhd has been appointed as the principal adviser and placement agent for the private placement.

Barring any unforeseen circumstances, and subject to requisite approvals from Bursa Securities and its shareholders, OCR Group expects the private placement to be completed by November 2023.

It is worth noting that in September last year, the group completed a private placement of 204 million shares — 30% of its then share base — to raise RM21.81 million, also mainly to fund its development projects.

OCR Group’s sole substantial shareholder is Ong Kah Hoe, who directly owns 186.29 million shares or an 18.82% stake, and another 41.68 million shares or 4.21% via OCR Land Holdings Sdn Bhd.

For the financial year ended Dec 31, 2022, OCR Group’s net loss narrowed 68.91% to RM8.06 million versus RM25.92 million a year earlier, in line with a fourfold rise in revenue to RM208.35 million from RM44.8 million previously.

At 11.07am on Friday, shares in OCR Group had slipped half a sen or 5.88% to eight sen, giving the group a market capitalisation of RM79.2 million.