This article first appeared in The Edge Financial Daily on November 8, 2018

KUALA LUMPUR: Damansara Realty Bhd announced yesterday it has terminated its plan to issue redeemable convertible notes (RCN) to raise up to RM150 million as the group intends to “anchor its group financing through commercial borrowings and internal funds”.

In a statement, Damansara Realty said it has been able to moderate its dependence on its original core business of property development for sustained profitability as well as steer its capability to lean on its own financial stance.

The group noted that it expects its stronger balance sheet to anchor its group financing through commercial borrowings and internal funds with the end of the RCN programme.

“We have returned to profitability and our balance sheet is not weighed down as before with the past financial issues,” said group managing director Brian Iskandar Zulkarim in the statement. “Damansara Realty has sharpened its focus for growth in our integrated facilities management division, which have yielded stable recurring income. Controlling operating cost and improving efficiency have improved our margins further.”

In an exchange filing yesterday, Damansara Realty said it had, together with Advance Opportunities Fund I, and Advance Capital Partners Asset Management Private Ltd, entered into a termination agreement yesterday to terminate, with immediate effect, the subscription agreement and the notes issue exercise implemented on Dec 5, 2017.

“Accordingly, effective from the date of the termination agreement, Damansara Realty will no longer issue the notes, and Advance Opportunities Fund I will discontinue subscribing to any notes henceforth,” read the filing.

The group said the trust deed will also be called off with immediate effect, following the termination of the subscription agreement.

The RCN programme, which was approved in November 2017, was initially intended to raise up to RM150 million in four tranches over a 36-month period.

To date, the group has only issued RM8 million in RCN and has now mutually agreed with the subscriber to repurchase the said issuance and to cancel the programme, it said.