Bina Puri to raise up to RM29.8m via private placement

KUALA LUMPUR (May 25): Bina Puri Holdings Bhd has proposed to raise up to RM29.76 million via a private placement exercise to meet working capital requirement and pare down its borrowings.

The property and construction group said the exercise involves issuing up to 93.01 million shares, equivalent to 30% of the enlarged capital, to selected investors. The shares will be issued at a price of not more than 10% discount to the five-day volume weighted average market price.

Assuming that the shares are issued at 32 sen apiece, Bina Puri said the private placement could net cash proceeds of between RM26.7 million and RM29.76 million, the bulk of which will be used to fund its property development projects in Kuala Lumpur, Sabah and Johor, as well as related construction jobs.

"The board, save for the interested directors, after having considered all aspects of the proposals, including but not limited to the rationale and effects of the proposals, is of the opinion that the proposals are in the best interests of the company," Bina Puri said in a filing with Bursa Malaysia.

Bina Puri said the group's current value of contract work in progress for its construction projects stands at around RM1 billion, while the estimated property development projects is appraised at a gross development value of RM3 billion.

To pare down its borrowings, Bina Puri said it intends to use RM3 million from the cash proceeds to repay its lenders, and subsequently reduce its current debt load of RM596 million.

At the prevailing interest rate of the group at an average of 8% per annum, Bina Puri anticipates an interest saving of RM240,000 per annum as the result of the repayment of bank borrowings, it added.

In addition to the share placement exercise, Bina Puri said it has also proposed to terminate the existing executives' share option scheme, and replace that with a new share issuance scheme of up to 15% of the enlarged share capital to eligible persons.

Among the reasons cited by Bina Puri in establishing the new scheme is "to recognise and reward the contributions and services of the eligible persons who are considered vital to the operation and continued growth of the group".

Bina Puri said it expects to complete the corporate proposals, which is facilitated and advised by TA Securities Holdings Bhd, in the second half of 2018.

Bina Puri's share price slipped 0.5 sen or 1.64% to close at 30 sen yesterday, for a market capitalisation of RM83.45 million. — theedgemarkets.com

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