Berjaya Corp proposes RM700m cash call

Berjaya Corporation Bhd (B-Corp) today announced that it is proposing to raise some RM700 million from shareholders.

It is proposing a rights issue on the basis of one five per cent RM1.00 Irredemable Convertible Loan Stock (ICULS) with one warrant for every six B-Corp shares held.

In a statement today, it said this would mean that a B-Corp shareholder holding 6,000 B-Corp shares will be entitled to subscribe for 1,000 five per cent ICULS of RM1.00 each and will also be given 1,000 warrants, free.

The shareholders will need to invest only RM1,000.

The five per cent ICULS of RM1.00 will be convertible into one new B-Corp share of RM1.00.

In the meantime, the five per cent ICULS will earn the holder interest at five per cent per annum.

Similarly, each warrant will entitle the holder to subscribe for one new B-Corp share at RM1.00.

Both, the five per cent ICULS and warrants will have a tenure of 10 years.

The proceeds from the rights issue will be substantially utilised to part repay (RM656.0 million) the loan to be taken for the proposed privatisation of Cosway Corporation Ltd (CCL).

B-Corp had on July 7 announced its intention to privatise CCL by offering its shareholders and ICULS holders HK$1.10 per HK$0.20 share or per HK$0.20 ICULS.

Tan Sri Vincent Tan holds in total, both directly and indirectly, about 445.75 million CCL shares and 565 million CCL ICULS which if sold under the privatisation offer will generate about HK$1.11 billion or about RM431 million at today’s exchange rate.

In addition, Rayvin Tan Yeong Sheik, a son of Tan will also stand to receive about RM191.8 million based on his stake of 227.25 million CCL ICULS and 221.7 million CCL shares.

On the question of what he intends to do with the RM431 million which he stands to receive from the sale of his CCL stakes, Tan revealed that he has given his irrevocable commitment to subscribe in full to the B-Corp rights issue entitlements arising from all the B-Corp shares held by him, both personally and through his private companies.

In addition, he and his son, Rayvin Tan have also committed to apply for excess rights ICULS.

In all, their combined irrevocable undertakings total RM560 million.

Assuming an underwriting fee of say, two per cent, this will save the company RM11.2 million.

B-Corp had also stated in the announcement that it has set RM660 million as the minimum subscription level for the rights issue to succeed.

This means the company will need to procure underwriters for at least RM100 million of the five per cent ICULS.

When asked if he was confident of the participation of underwriters to ensure the success of the rights issue, Tan expressed his hope that the underwriters will take into account his and Rayvin Tan’s undertakings to commit RM560 million as well as the group’s strong underlying fundamentals. - Bernama