MRCB: Rights issue a success

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) has the right resources to help the government and the Employees Provident Fund (EPF) in implementing the proposed development of 3,000 acres (1,214ha) of land in Sungai Buloh for a new hub in the Klang Valley, said MRCB CEO Mohamed Razeek Hussain.

“With the success of Kuala Lumpur Sentral as one of the leading urban property and infrastructure developments in our country, we believe MRCB group has the right resources to play a role to help the government and EPF to implement the Sungai Buloh development,” he said in a statement last Friday.

Razeek was responding to Petaling Jaya Utara member of parliament Tony Pua who is questioning the suitability of MRCB being appointed the master developer of the Sungai Buloh land in a joint venture with the government and the EPF.

The Edge Financial Daily had earlier reported that MRCB was likely to be appointed the master planner and lead developer.

Pua had pointed out that in MRCB’s recent rights issue exercise, the EPF had to spend RM192 million to buy up 171.4 million shares at RM1.12 each which were not taken up. He attributed this to “a clear lack of market confidence in MRCB, and its major shareholder, EPF, had to come to the rescue”, questioning the basis of MRCB’s purported appointment given that it “was facing financial difficulties” and in the absence of any open tender.

MRCB dismissed the allegations, saying that “its rights issue exercise was a success and it has achieved the company’s objective”.

It said the total acceptances and excess applications received from the rights issue were for 796.35 million rights shares, representing an over-subscription of about 74.87% over the 455.39 million rights shares available for subscription.

MRCB added that the EPF was alloted 171.47 million new shares pursuant to its entitlement as shareholder under the rights issue.

“The rights issue exercise was oversubscribed by 1.74 times and we have successfully raised RM510 million, of which RM380 million is reserved for the company’s new business expansion and future acquisitions,” Razeek said.

This article appeared in The Edge Financial Daily, April 5, 2010.
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