Hap Seng plans RM1.5b private placements, rights

Hap Seng Consolidated Bhd (HSCB) (3034) plans to undertake private placements and rights issue to raise up to RM1.5 billion for its future expansion.
"HSCB has a long and proud track record of growth and development in Malaysia. These initiatives mark one of our most significant corporate actions since our listing in 1978 and will provide existing and new shareholders with an opportunity to share our growth," HSCB managing director Datuk Edward Lee Ming Foo said in a statement yesterday.

The money raised will be used for growth initiatives in property investment and development, auto dealerships and building materials.

HSCB shares were suspended yesterday but closed at a record high of RM7.36 on Thursday, up 23 sen.

The company plans to place out 124.53 million new RM1 shares or up to 20 per cent of its current share capital, a two-for-one bonus issue of up to 1.49 million new shares, and a one-for-five renounceable rights issue of up to 448.31 million shares.
The rights issue will be offered at 35 per cent discount and with a free detachable warrant for each rights share.

Additional proceeds from the warrants exercise will be used as working capital.

HSCB has also set a dividend policy to pay up to 50 per cent of its net profits going forward.

"These proposals are intended to both reward our policyholders for their loyalty and set the stage for HSCB to achieve its growth ambitions", HSCB chairman Datuk Jorgen Bornhoft said.

"Malaysia's economy is poised for significant growth over the coming years. With our key businesses in property investment and development, auto dealerships, fertilisers, plantations and building materials, we believe we are well positioned to execute our expansion plans and benefit from that growth," Bornhoft added.

Further details of the initiatives will be made available in the company's circular to shareholders that may be dispatched by end-February.

CIMB Investment Bank Bhd has been appointed as the adviser for the proposals and the joint global coordinator together with UBS AG for the placement exercise.