The corporate exercise will entail the issuance of 6.62 million new shares, and upon completion of the placement, the unidentified corporate investor will hold 9.1% of the enlarged issued and paid-up share capital of BDB, effectively becoming a substantial shareholder of the group.
The shares will be issued at RM1.20 apiece, representing a six sen premium or 5.3% over the five-day weighted average market price of BDB shares up to Nov 19 of RM1.14, after taking into account the prevailing market price and liquidity of its shares and the negotiations between the company and the identified investor.
BDB stands to raise up to RM7.94 million from the corporate exercise, and expects to utilise up to RM7.78 million as working capital with the remainder will be used to defray the cost of the private placement.
The group said the corporate exercise will allow it to place shares to an interested investor who is keen to participate in its equity, raise funds for its projects, strengthen its capital base, lower its gearing from 0.66 times to 0.64 times and boost liquidity of its shares in the market.
Its projects include its townships in Kedah — namely, Bandar Darulaman in Jitra, Darulaman Utama in Kuala Ketil and Darulaman Perdana in Sungai Petani.
BDB's other smaller projects are Taman Nusantara and Taman Lelasari 2 in Alor Setar, as well as the permanent campus of Kolej Universiti Insaniah in Kuala Ketil.
The group's earnings per share is expected to be diluted while the stake of its largest shareholder Perbadanan Kemajuan Negeri Kedah is expected to be reduced slightly to 54.49% from the 59.94% held as at Nov 19.
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