KUALA LUMPUR (April 24): I-Bhd, which develops properties and operates theme parks, said on Wednesday it is planning to issue preference shares to its major shareholder in a deal that could raise up to RM100 million.
The proposal calls for the issuance of up to 100 million redeemable preference shares to Sumurwang Sdn Bhd at RM1 apiece, according to an exchange filing. The shares are non-tradable and not convertible into ordinary shares of the company, it noted.
Sumurwang is controlled by I-Bhd chairman Tan Sri Lim Kim Hong, and the deal will allow I-Bhd to speed up development pipeline in i-City to “leverage the anticipated upswing” in the property market, I-Bhd said in a separate statement.
I-Bhd has earmarked RM45 million of the proceeds to settle advances provided by Sumurwang for its business and RM40 million to fund the ongoing BeCentral Residences project. The company also plans to use RM14.65 million as working capital and the remainder to defray expenses for the issuance.
Sumurwang owns a direct 57% stake in I-Bhd and another 6% indirectly.
“The board is of the view that the proposed issuance is an appropriate avenue to raise the necessary funding”, allowing the company to raise funds without security and at a rate lower compared to the existing bank borrowing rate that ranges from 4.21% to 5%, I-Bhd said.
The BeCentral Residences, comprising two towers with a total of 986 units, is currently under construction and is expected to be completed by the end of 2025.
The entire project is expected to cost RM336.7 million, of which 45% has been spent and the remaining will be funded from proceeds of the share issue and internally generated funds, I-Bhd said. The proposals are expected to be completed in the third quarter of 2024, the company added.
Apart from BeCentral Residences, another project under construction is the 8 Premier corporate-and-retail spaces. The two projects have a combined gross development value of about RM700 million.
The RM100 million infusion will “catalyse” the development of the remaining gross development value of RM5 billion in i-City “and strengthen the path for unparalleled growth and prosperity”, the company said.
“With the financial backing in place, the group is set to grow its RM1 billion investment property portfolio and maximise returns from assets” such as Mercu Maybank tower, DoubleTree Hilton i-City, Best Western hotel, Central i-City regional mall, Tier-3 Data Centre and carpark facilities, it added.
AmInvestment Bank is the adviser to I-Bhd for the proposed issuance while cfSolutions Sdn Bhd has been appointed by the company to act as independent adviser to other directors and minority shareholders.
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Source: EdgeProp.my
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