Tanco to raise RM100m for working capital via preference shares to Socso

• In a bourse filing on Tuesday (Oct 25), Tanco said it had signed a term sheet with Socso for the proposed RPS subscription by the latter.

KUALA LUMPUR (Oct 25): Property developer Tanco Holdings Bhd has proposed to raise RM100 million through an allotment of 100 million redeemable preference shares (RPS) of RM1 each to the Social Security Organisation (Socso).

The funds raised will be used for working capital, investments and targeted expansion of the companies within Tanco and its subsidiaries.

In a bourse filing on Tuesday (Oct 25), loss-making Tanco said it had signed a term sheet with Socso for the proposed RPS subscription by the latter.

“The company will utilise the proceeds only for the use of working capital and investment in (these) business segments, (namely) property development, construction and building materials, pharmaceutical, and synergistic investments,” it added.

Tanco said each RPS will carry a fixed non-cumulative preferential dividend at the rate of 8% per year throughout the five-year tenure from the date of the issuance of the RPS by the company to Socso.

Tanco also said it will offer land belonging to the group to be caveated for the purpose of continuing security of the investment amount.

The earnings per share of Tanco group will not be diluted, as the RPS will not be convertible into Tanco shares, it added.

On Oct 21, Tanco had proposed to raise up to RM47.7 million through a private placement of up to 176.66 million new shares, or up to 10% of its total issued shares, to repay bank borrowings, for acquisitions and/or investments in complementary businesses and/or assets and working capital.

As at end-September 2022, the group’s total borrowings stood at RM40.8 million.

Tanco shares closed up 0.5 sen or 1.47% at 34.5 sen on Tuesday, bringing the company a market capitalisation of RM609.48 million. A total of 25.67 million shares were traded.