Mah Sing's rights issue with warrants oversubscribed 4.61%

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KUALA LUMPUR (Feb 17): Mah Sing Group Bhd, the country's second largest property developer by sales value, saw its renounceable rights issue of 443.19 million new shares oversubscribe by 4.61% or 20.44 million shares.

Mah Sing (fundamental: 2.2; valuation: 2.4) had received valid acceptances and excess applications for a total of 463.63 million rights shares.

In a statement today, Mah Sing said the excess application was 11.67% or 51.74 million shares as shareholders took the opportunity to increase their equity participation, indicating strong investor confidence in the property developer. 

The rights issue come with 132.96 million free warrants on the basis of three warrants for every 10 rights shares subscribed at an issue price of RM1.42 per rights share.

Mah Sing's rights issue has raised RM629 million, of which up to RM530 million will be primarily used for land acquisition and property development activities, and the balance for working capital and payment for the rights issue's expenses. 

The rights shares and warrants are expected to be listed on the Main Market of Bursa Malaysia on Feb 26.

"Approximately RM370 million has been earmarked as part payment for the acquisition of land in Puchong (Festival Lakecity), Selangor and Seremban," Mah Sing said, adding that both lands are being prepared for preview in 2015, with expected revenue contributions to commence from 2016 onwards. 

Mah Sing plans to embark on an integrated mixed development with a potential gross development value (GDV) of approximately RM9.3 billion on the Puchong land. The group has also been granted the option for an additional 171 acres adjacent to the land. 

While the Seremban land will include a proposed residential development of terrace, superlink, Semi-detached and bungalow homes with a potential GDV of RM7.5 billion.

Mah Sing has unbilled sales of RM5.26 billion to date. 

At midday break, Mah Sing was up 3 sen or 1.5% at RM2.03, giving it a market capitalisation of RM3.84 billion.

(Notes: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)