This article first appeared in The Edge Financial Daily, on December 9, 2015.
KUALA LUMPUR: GIC Pvt Ltd and the Jardine Matheson Group are both said to be showing keen interest in Malaysian Resources Corp Bhd (MRCB), and could each be taking up a stake in the company via its recent proposed private placement exercise, according to a source close to the matter.
“There has of course been interest shown in MRCB’s placement shares by local funds such as Kumpulan Wang Persaraan (Diperbadankan) and local banks, but a game changer is these two international firms are said to be showing a keen interest in taking up a piece of MRCB in their ongoing discussions with the company,” the source told The Edge Financial Daily.
GIC is one of the world’s largest global investors, with well over US$100 billion (RM427 billion) of assets in more than 40 countries worldwide, and the group also manages most of the Singapore government’s financial assets.
According to Bloomberg data, the group has shareholdings in several Bursa Malaysia entities, such as a 0.91% stake in Public Bank Bhd, 0.55% of Genting Bhd, 0.83% of AMMB Holdings Bhd and 0.77% of Media Prima Bhd.
Jardine Matheson is a diversified business group focused principally on Asia, and its businesses comprise a combination of cash-generating activities and long-term property assets.
The group’s interests include Jardine Pacific, Jardine Motors, Jardine Lloyd Thompson, Hongkong Land, Dairy Farm, Mandarin Oriental, Jardine Cycle & Carriage and Astra International.
Judging by the size and the modus operandi of both outfits, it would not be surprising if they both decide to take up a substantial stake via MRCB’s proposed private placement exercise.
To recap, MRCB on Nov 16, 2015, said it would undertake a private placement of up to 20% of its issued and paid-up share capital to its major shareholder Gapurna Sdn Bhd and independent third-party investors to be identified later, which could raise up to RM612.08 million for its property development activities, working capital and repayment of borrowings.
This will entail the placement of between 357.32 million (minimum scenario) and 493.61 million (maximum scenario) new shares, at an indicative issue price of RM1.24 per share.
The actual issue price of the placement shares will be determined at a later date after the receipt of all relevant approvals for the proposed private placement.
Gapurna, which is controlled by MRCB group managing director Tan Sri Mohamad Salim Fateh Din, has given an undertaking to subscribe for 60 million of the placement shares, and indicated its intention to subscribe for a further 60 million, subject to, among others, when the proposed private placement is implemented, the actual issue of the placement shares, and its cash flow and/or availability of external financing.
This would leave, under the maximum scenario, 373.61 milllion placement shares, representing a 15% stake, to be placed out to independent third-party investors.
It would not come as a surprise that MRCB has garnered interest from the international investing fraternity. Just this year alone, MRCB scored a hat-trick when it secured two major job wins for the development and construction of the Kwasa Utama commercial project worth RM3.15 billion, and the regeneration of facilities at the National Sports Complex in Bukit Jalil, Kuala Lumpur, worth RM1.63 billion.
The group also announced that it will be partaking in a joint- venture partnership with government-owned Cyberview Sdn Bhd to undertake the development of the Cyberjaya City Centre, which has a reported gross development value of close to RM10 billion.
Whether these achievements are enough to garner substantial investments from two renowned international firms is yet to be seen.
MRCB shares closed down 0.79% to RM1.26 yesterday, with a market capitalisation of RM1.79 billion.