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Magna Prima mulls fund raising, likely for Lai Meng land development

KUALA LUMPUR: Developer Magna Prima Bhd is mulling over a fund raising exercise, possibly to fund the initial construction works of its upcoming development on a premium tract in Jalan Ampang on which SRJK (C) Lai Meng is located.

The company had previously said the Lai Meng land development could produce a total gross development value of RM1.8 billion.

“We will make the necessary announcement to the exchange at the appropriate time upon finalisation of the terms and timing of the proposed fund raising exercise,” Magna Prima told Bursa Malaysia yesterday.

The company was replying to a Bursa query on the unusual gains in its share price which had spiked as much as 34% intra-day to hit limit-up on July 16.

On July 16, the stock had risen as much as 30 sen to RM1.18 before closing at RM1.16 with some 8.5 million shares traded. It closed unchanged yesterday at RM1.16, after rising to an intra-day high of RM1.33. At RM1.16, Magna Prima has a market capitalisation of RM386.2 million.

The group’s balance sheet as at March 31 showed a cash balance of RM15.8 million plus cash held under a housing development account of RM4.4 million. Bank borrowings amounted to RM164.83 million, some RM134.11 million of which was long-term.

In the first quarter ended March 31, Magna Prima posted a net profit of RM23.3 million compared with a net profit of RM1 million a year ago. Its revenue jumped to RM113.5 million from RM5.3 million previously.

InsiderAsia analyst Linda Koh believes the recent share price hike is not related to the fund raising exercise, as the activity would cause near-term dilution.

“The company is probably going to launch some projects that have not been disclosed,” she said.

She also said Magna Prima is trying to finish what is on its plate by rolling out all the planned projects this year.

It has been reported the Lai Meng land development will be Magna Prima’s largest thus far.

Magna Prima will take possession of the land by year-end, upon the relocation of the school to its new premises in Bukit Jalil.

The developer plans to build two 60-storey towers on the site with one tower comprising serviced apartments and the other housing a hotel and office lots.

According to its 2012 annual report, Magna Prima has completed 68.09% of the new school in Bukit Jalil.

Twice the size of the current school, the new premises is slated to be completed by October, in time for the new term in 2014.

 

This article first appeared in The Edge Financial Daily, on July 18, 2013.

 

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