KUALA LUMPUR (Aug 23): Sime Darby Bhd is proposing a placement up to 316.35 million new shares, or 5% of its existing share base, to local and foreign investors to be identified via book-building.

In a filing to the exchange this afternoon, the conglomerate said the issue price for the placement shares will be fixed at a date to be determined later following the receipt of all requisite approvals for the placement, and will be determined by way of book-building.

Assuming a 5% discount to the five-day volume weighted average market price of Sime Darby shares up to and including Aug 15 of RM7.90, the indicative issue price for the placement shares would be RM7.51.

Based on this indicative price and 316.35 million placement shares, the proposed placement is expected to raise gross proceeds of about RM2.37 billion.

Sime Darby proposed to use 50% of the proceeds for the repayment of the group's borrowings, while 40% will go for capital expenditure for the group's plantation, motors and property businesses.

The remaining 10% will be used for working capital and estimated expenses for the placement exercise.

Sime Darby said the proceeds from the placement will improve the group's liquidity through the repayment of a substantial portion of the group's borrowings, which will result in interest savings.

The exercise would be subject to approval from Bursa Securities as well as the shareholders of Sime Darby at an extraordinary general meeting to be convened.

Amanah Saham Bumiputera is the major shareholder of Sime Darby with a 42.5% stake, while the Employees Provident Fund has an 11.8% stake in the group.

Barring any unforeseen circumstances, the board expects to complete the proposed placement by the end of 2016.

At 2.59pm, Sime Darby fell 37 sen or 4.55% to RM7.77, for a market capitalisation of RM51.63 billion. — theedgemarkets.com

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