UEM Land Holdings Berhad (ULHB) intends to undertake a rights issue to raise about RM970 million gross proceeds.
The proceeds will be used for payment of the acquisition of land in Cyberjaya, repayment of borrowings, working capital purposes, and payment for property development, said ULHB in a statement.
According to Wan Abdullah Wan Ibrahim, Managing Director and Chief Executive Officer of ULHB, the rights issue would enable the firm to raise funds to reduce interest cost and repay borrowings, which would lead to a more robust capital structure.
“Further, the inflow of capital for our property development activities will accelerate the realisation of value from our Nusajaya land bank and spur ULHB’s future earnings growth,” Wan Abdullah said.
He added that ULBH has several property projects in the pipeline, which are slated to be launched soon. He is confident that these projects will receive good response from the market.
“We are also optimistic that for 2010, the overall property market in Malaysia will outperform 2009 — particularly for Johor where we expect a lot of excitement arising from the successful implementation of Iskandar Malaysia’s initiatives and the spillover demand from Singapore with the recovery of Singapore’s property market and the opening of the Marina Bay Sands and Resorts World Sentosa,” he said.
According to ULHB, its major shareholder, UEM Group Bhd (UEMG), has provided irrevocable written undertaking to subscribe to its entitlement under the proposed rights issue.
“As at 31 Dec 2009, UEMG has a direct stake of 1.873 billion in ULHB shares, representing 77.14 per cent equity interest in ULHB,” it said.
“The remaining portion is expected to be underwritten.”
The proposed rights issue is expected to be completed by 30 Apr 2010.