SP Setia To Raise RM3.6 Bln To Fund I&P Group Acquisition

Last update: 22/06/2017KUALA LUMPUR, June 22 (Bernama) -- SP Setia Bhd plans to raise RM3.6 billion via rights issue, rights issue of new class B Islamic redeemable convertible preference shares (RCPS-I B) and proposed placement of new shares to mainly fund the acquisition of I&P Group Sdn Bhd from Permodalan Nasional Bhd.

In a filing to Bursa Malaysia, SP Setia said, it planned to raise proceeds of up to RM1.2 billion each from the proposed exercises.

The proposed acquisition of I&P Group cost RM3.65 billion, it said.

About RM2 billion from the proceeds would be used for the acquisition while the remaining would be from the proposed exercises, bank borrowings of RM1.5 billion as well as internally-generated funds of RM150 million, said the property developer.

The remaining proceeds would also be used for new and on-going property development projects and general working capital requirements of the enlarged SP Setia Group as well as expenses relating to the proposals, it said.

Among the rationale for I&P Group acquisition, SP Setia said, it has 1,730 ha of landbank in the Klang Valley and Johor Bahru, which would complement and enlarge its existing landbank.

I&P Group's landbank were also strategically located close to the vicinity of its existing projects in the Klang Valley and Johor.

"The proposed acquisition will also enable the SP Setia Group to leverage on the development potentials of the I&P Group landbank to boost its future growth in these key regions," it said.

SP Setia said upon the completion of the proposed I&P Group acquisition and the proposed equity fund raising, the net gearing of the enlarged SP Setia Group will remain low and this will provide financial flexibility for the group to fund its future property development projects.