Mah Sing to buy back its bonds

KUALA LUMPUR (Feb 16): Mah Sing Group Bhd, the country’s second-largest property developer by sales value, is to buy back all of its unconverted secured bonds for RM337.1 million.

The RM315 million nominal value of redeemable convertible secured bonds will be cancelled after the repurchase, the group said in a filing with Bursa Malaysia yesterday.

In June 2011, Mah Sing issued RM325 million nominal value of the bonds. In June 2015, it announced that RM10 million nominal value of the bonds were converted to 8.77 million new shares at the conversion price of RM1.14.

The group said it is now buying back the remaining RM315 million nominal value of the bonds, as they are “in-the-money”, given the RM1.14 conversion price.

“The convertible bonds repurchase allowed the company to avoid the issuance of approximately 276.3 million Mah Sing shares, representing approximately 11.5% of the existing issued and paid-up share capital of Mah Sing as at Feb 12, 2016.

“Based on the purchase consideration of RM337.1 million and the conversion price of the bonds of RM1.14, the effective price per Mah Sing share is RM1.22, representing a discount of 11.07%, 5.65% and 3.63% to the three-month, one-month and five-day volume weighted average market price of Mah Sing shares, up to and including Feb 12 of RM1.3718, RM1.2930 and RM1.2659 respectively,” it added.

Mah Sing said it will pay for the repurchase by using the balance proceeds from the rights issue of new Mah Sing shares with warrants undertaken in February 2015, as well as internal funds.

Shares in Mah Sing closed one sen or 0.79% lower at RM1.25 yesterday, with a market capitalisation of RM3.01 billion.

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This article first appeared in The Edge Financial Daily, on Feb 16, 2016. Subscribe to The Edge Financial Daily here.