KUALA LUMPUR (Aug 26): Titijaya Land Bhd plans to raise up to RM101.48 million to fund its existing property development projects via a three-for-two renounceable rights issue.

In a filing with Bursa Malaysia today, Titijaya said it is proposing to undertake a renounceable rights issue of up to 615 million new irredeemable convertible preference shares (ICPS) at an issue price to be determined later.

Based on the indicative issue price of 16.5 sen per ICPS, the minimum proceeds to be raised from the proposed rights issue is RM58.28 million and the maximum amount is RM101.48 million.

Titijaya said the group intends to utilise up to RM70.83 million of the proceeds to fund its existing property development projects and up to RM30 million to partially repay bank borrowings.

 As at June 30, 2016, the group’s total bank borrowings stood at RM205.88 million, comprising term loan, bank overdrafts and hire purchase payables.

"The proceeds will mainly be utilised for the H20 project in Ara Damansara, Petaling Jaya, Selangor, which has an estimated gross development value (GDV) and gross development cost (GDC) of RM750 million and RM510 million, respectively. This will provide an estimated gross profit of RM240 million over a period of four years," it said.

H20 features four blocks of service apartments housing 1,357 units and is expected to complete by the end of 2018.

Another project is Emery located in Kemensah, Ampang here with an estimated GDV and GDC of RM150 million and RM120 million, respectively. This project will provide an estimated gross profit of RM30 million over two years, said Titijaya.

Emery consists of 50 semi-detached houses and is expected to complete by mid of 2017.

"The actual gross proceeds to be raised from the proposed rights issue are dependent on the actual number of ICPS to be issued. Any variation in the actual gross proceeds raised will be adjusted against the proceeds allocated for property development expenditure and/or partial repayment of bank borrowings of the group," said Titijaya.

To accommodate the fundraising exercise, the group plans to increase its authorised share capital to RM1 billion with 1.8 billion shares, from RM300 million with 500 million shares.

The proposals are subject to approvals being obtained from the relevant regulators and the shareholders of Titijaya at an extraordinary general meeting to be convened.

Barring any unforeseen circumstances and subject to the approvals of the relevant authorities being obtained, Titijaya expects the proposals to be completed in the first quarter of 2017.

Titijaya shares closed one sen or 0.62% lower at RM1.59 today, giving it a market capitalisation of RM583 million.