Aspen to raise RM69m via placement of 10% stake to Singapore's Oxley

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KUALA LUMPUR (April 30): Penang-based Aspen Group Holdings Ltd plans to raise RM69 million through placing of a 10.07% stake at 24 Singapore cents each with Singaporean property developer Oxley Holdings Ltd.

Aspen said it will use the proceeds for the acquisition of land bank, future developments and working capital.

In a statement today, Aspen said it has entered into a placement agreement with Oxley whereby the latter will subscribe to 97 million new shares in the issued share capital of Aspen.

The 24 Singapore cents per share for 97 million new shares in Aspen represents a 14.72% premium over the volume weighted average price of 20.92 Singapore cents for Aspen's stock on April 27 — the last full market day prior to both parties signing the agreement on April 30.

Upon completion of the placement, Aspen's issued shares will increase to 963.62 million shares.

“We are excited with this corporate exercise embarked upon by Aspen. This placement of new shares will allow us to tap into the synergistic opportunities that Oxley can offer, given that both companies are founded with the vision of providing affordable real estate with quality craftmanship without compromising on the sophisticated and vibrant lifestyle that the market needs,” said its president and group chief executive officer Datuk M. Murly.

“The greatest similarity between Aspen and Oxley is that we are able to transform prime landbank into accessible and affordable developments with competitive price-points that cater to the needs of the middle-income group, as well as to develop large scale master developments throughout the region,” he added.

“The strategic partnership with Oxley will forge a long-term and mutually beneficial relationship that will enable the Group to progress to another level of growth. We believe the synergy between Aspen and Oxley will unlock many business and development opportunities for both companies,” said Murly.

Where possible, Oxley may engage the group via various joint ventures for the development of Oxley’s property development projects in Malaysia and each party will collaborate with the other to cross market each other’s property developments.

The two companies may also co-invest in suitable property developments in the region.

As at Dec 31, 2017, Aspen has four ongoing projects under construction and four upcoming developments, all in Penang with 3,974 residential units totalling 4.55 million sq ft; 1.94 million sq ft of commercial shop offices and 1.35 million sq ft of leasable retail spaces. With total unbilled sales of RM864.22 million as at Dec 31, 2017, the group expects revenue growth to continue with further sales and construction of its four ongoing projects.

Oxley currently owns a 20% stake in Galliard (Group) Ltd of the UK, a 40% stake in Australia's Pindan Group Pty Ltd and a 15% stake in United Engineers, a Singaporean property development and engineering company. It has presence in 12 countries.

Aspen shares closed up one Singapore cent or 4.88% at 21 Singapore cents today, bringing it a market capitalisation of S$190.66 million.