KUALA LUMPUR (Oct 2): Sanbumi Holdings Bhd has proposed to place out new shares to Penang-based property developer Iconic Group Sdn Bhd founder and chairman Datuk Tan Kean Tet to raise about RM3.92 million for working capital and/or future business project(s) or investment(s).

According to a bourse filing today, Sanbumi has entered into a conditional share subscription agreement with Tan for the proposed placement of 22.64 million new shares in Sanbumi, representing 10% of the issued shares at 17.3 sen per placement share.

The placement shares of 17.3 sen apiece is at a 13.5% discount to its closing price of 20 sen today.

“The proposed placement will enable the company to raise funds to meet its working capital requirements and to embark on future business project(s)/investment(s), as and when such opportunity arises, without incurring additional interest costs as compared to bank borrowings,” said Sanbumi.

The proposed exercise could also strengthen the company’s financial position and capital base as well as enhance and improve the shareholder mix in the company, and may potentially enhance the liquidity of its shares.

The company has been working towards diversifying the group’s business to include property development and investment since it procured the approval of its shareholders for such diversification on Sept 30, 2015.

Sanbumi said the offer from Tan to subscribe for the placement shares comes at an opportune time as it allows the company to bring Tan in as a strategic investor and the company will be able to tap and leverage on Tan’s experience in property development as well as hotel development and management.

After the completion of the proposed placement, Tan’s total shareholding will rise to about 10.35% or 25.79 million shares, while Sanbumi's enlarged issued capital will be 249.01 million worth RM45.86 million.

Barring any unforeseen circumstances, the proposed exercise is expected to be completed by December.

Sanbumi’s market capitalisation stood at RM45.28 million today.