Tebrau Teguh to raise up to RM669.7m

Tebrau Teguh to raise up to RM669.7m
Business & Markets 2013
Written by Charlotte Chong of theedgemalaysia.com
Friday, 27 December 2013 09:45

KUALA LUMPUR: Johor-based property player Tebrau Teguh Bhd has proposed a cash call to raise up to RM669.7 million and the proceeds will be used to repay loans, develop properties and for future investments.

In a related development, Tebrau Teguh proposed the establishment of a joint venture (JV) with Golddust United Sdn Bhd, a wholly-owned unit of Tropicana Corp Bhd, to jointly develop 84.6 acres of land in Johor.

The JV company, Renown Dynamics Sdn Bhd (RDSB), will acquire the parcel, which is partially under water and needs to be reclaimed, for RM444.3 million from Tebrau Teguh.

Golddust United will hold 70% in the joint venture while the remaining 30% will be held by Tebrau Teguh.

It said in an announcement to Bursa Malaysia yesterday that the expected gross development value of the 99-year leasehold land that will be developed into a mixed development comprising commercial and residential components is RM3.7 billion.

As part of the condition, Tebrau Teguh is to reclaim at least 60 acres of the 84.6 acres before the transaction can be completed.

On its fundraising, Tebrau Teguh is proposing a renounceable rights issue that will see the issuance of up to 669.7 million ordinary shares on the basis of one rights share for every one existing ordinary share at an issue price of RM1. The exercise will be sweetened by 334.9 million free detachable warrants on the basis of one free warrant for every two rights shares subscribed.

Tebrau said the issue price of RM1 per rights share represented a discount of about 13.12% to the resulting theoretical ex-rights price (TERP) of RM1.15, based on the five-day volume weighted average market price (VWAMP). The board has fixed the exercise price of the warrants at RM1.30 apiece, or a premium of about 12.95% to the TERP, based on the five-day VWAMP.

Tebrau has procured an irrevocable written undertaking from its major shareholder Iskandar Waterfront Holdings Sdn Bhd that it will subscribe in full to its entitlement of 47.16%.

Under the minimum subscription scenario, Tebrau Teguh will raise RM315.9 million. It will also result in Iskandar Waterfront Holdings increasing its direct equity interest to 64.09% from 47.16%.

To maintain its listing status on Bursa Malaysia, Tebrau Teguh has proposed an exemption on the takeover and merger by Iskandar Waterfront Holdings.

Iskandar Waterfront Holdings, controlled by Tan Sri Lim Kang Hoo, triggered a mandatory takeover offer when it acquired the 33.15% shares in Tebrau Teguh from Kumpulan Prasarana Rakyat Johor Sdn Bhd last year.


This article first appeared in The Edge Financial Daily, on December 27, 2013.