KUALA LUMPUR (Oct 17): OCR Group Bhd  has proposed to raise up to RM8.92 million via a private placement to third party investors to be identified later, to support construction works for a 41-storey commercial building.

In a filing with the stock exchange today, OCR said the proposed placement entails the issuance of up to 29.24 million shares representing 10% of the total number of its issued shares.

“The placement shares will be issued based on a discount of not more than 10% to the five-day volume-weighted average market price (VWAP) of OCR shares immediately preceding the price-fixing date, to be determined by the board after taking into consideration the prevailing market conditions.

“As the proposed private placement may be implemented in several tranches within six months, there could potentially be several price fixing dates and issue prices,” it added.

Assuming the placement shares are placed out at an illustrative issue price of 30.5 sen per share, a 9.4% discount to the five-day VWAP of OCR shares as at Oct 8, the proposed exercise is expected to raise gross proceeds of RM8.92 million.

Of this, RM8.84 million will be used for its construction project in Sunway Mentari, Petaling Jaya in Selangor. The remaining RM80,000 is for expenses for the corporate exercise.

On May 15, OCR’s wholly-owned subsidiary O&C Construction Sdn Bhd was appointed by OCR Properties (YOLO) Sdn Bhd as contactor for the construction works of a 41-storey building in Sunway Mentari. The project comprises office units, shoplots, commercial space, gymnasium, swimming pool, carpark and other ancilalary facilities for a total contract sum of RM100 million. In June, the project was revised down to RM96.4 million, due to a reduction in scope of work.

OCR said construction works for the project are expected to commence within one month from completion of the proposed private placement and are expected to be completed within three years.

"Barring any unforeseen circumstances, the proposed private placement is expected to be completed by the fourth quarter of this year," it added.

Shares in OCR closed unchanged at 32.5 sen today, for a market capitalisation of RM95.03 million.