KUALA LUMPUR: MALAYSIAN RESOURCES CORP [] Bhd plans to undertake a renounceable rights issue to raise up to RM566 million, of which RM380 million would be used as capital expenditure for future expansion.
The company said on Thursday, Nov 5 the issue price would be RM1.172 per rights share, a discount of about 9.8% to the theoretical ex-rights price of MRCB shares of RM1.30,based on the three-month weighted average market price of about RM1.36.
"The basis for the proposed rights issue is one rights share for every two existing MRCB shares held at the entitlement date," it said. The corporate exercise is expected to be completed in 1Q next year.
MRCB said the RM380 million would be for future business investments and expansion of its core activities mainly acquiring prime land for development, investment opportunities in strategic property development, expansion in environmental engineering and infrastructure business opportunities.
It said there may be further capital requirements subsequent to the announcement and prior to the company receiving the proceeds from the proposed rights issue.
"The company will meet such capital requirements via internally generated funds and/or bank borrowings and reimburse from the amount allocated for this purpose," it said.
MRCB said RM85 million of the RM566 million would be used equity investments in its 51% owned Nu Sentral Sdn Bhd -- a joint-venture company between MRCB and Pelaburan Hartanah Bhd.
Nu Sentral was set up to acquire and manage Nu Sentral - a seven-storey retail mall within the Kuala Lumpur Sentral development - currently under development and covering a gross floor area of about 1.2 million square feet. It is targeted to be completed by 2012.
The total investment for the retail mall of about RM800 million will be funded via a combination of equity contributions and bank borrowings. So far, MRCB has invested about RM38.0 million in Nu Sentral which was funded via working capital and bank borrowings.
The remaining funds would be used for working capital and listing expenses.
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