KUALA LUMPUR (Oct 8): Shareholders of Bina Puri Holdings Bhd have approved a proposed reduction of its issued and paid-up capital via the cancellation of 50 sen of the par value of every RM1 ordinary share, as well as a proposed private placement of up to 37.37 million new shares that represent approximately 20% of its enlarged share base.

With the par value reduction, it will give rise to a credit under its retained profits of up to RM93.4 million in a “maximum” scenario, assuming a full exercise of its outstanding employee share option scheme (ESOS) options into new shares.

Chairman Tan Sri Wong Foon Meng, when speaking to reporters after the group's extraordinary general meeting today, said Bina Puri’s shares have been trading below its par value of RM1 in the past two years, hence the par value reduction will enable it to raise funds to fund its activities.

As to the private placement, Bina Puri is expected to raise RM23.17 million from it in a “maximum” scenario. Of that, RM17.47 million or 75.4% will be allocated for working capital requirements. Another RM5 million will be set aside to repay bank borrowings, which will reduce its gearing from 3.64 times as at Dec 31 last year to 2.74 times, while the remainder, about RM700,000, will be used to repay expenses related to exercising the proposals.

Bina Puri group executive director Matthew Tee said the group is comfortable with its current gearing level as most of its borrowings are pegged to its projects.

Tee added that the group aims to continue building its recurring income segments, which includes its power plants and highway concession segments.