KUCHING: Bina Puri Holdings Bhd has proposed to undertake a renounceable rights issue with free detachable warrants that could raise up to RM39.54 million. Proceeds from the fund raising exercise will be utilised to fund the group’s existing construction and property development projects which include the Pan Borneo Highway project and 1 Puri Commercial Centre, Kuching.
The funds raised would also be used to pare down group bank borrowings and as working capital. Bina Puri proposes to issue up to about 439.35 million rights shares together with the same number of warrants to be implemented on a renounceable basis of one rights share together with one free warrant for every one existing share held by the entitled shareholders . Base on an illustrative issue price of 9 sen per rights share, the exercise will raise a minimim RM20 million and maximum RM39.54 million, Bina Puri said in a filing with Bursa Malaysia.
Bina Puri closed at 17.5sen on Wednesday. To achieve the minimum subscription level, group managing director Tan Sri Tee Hock Seng and group executive director Datuk Mathew Tee Kai Woon have undertaken to subscribe in full for their respective rights share entitlements and additional rights shares not taken up by other entitled shareholders by way of excess rights shares application up to RM2 million and RM3 million respectively.
The company plans to procure an underwriting arrangement whereby the underwriter(s) will be required to pick up at least 166.67 million rights shares (RM15 million) together with a similar number of warrants. On the utilisation of the proceeds from the rights issue, Bina Puri said RM10 million would be set aside under the minimum scenario and RM27 million under the maximum scenario to fund the group’s existing and construction projects.
The money will be used to pay contractors, for material costs, earthworks, piling works, site clearing, building and external works as well as payment to the relevant authorities. Under both scenarios, RM5 million would be for repayment of borrowings while RM3.6 million (minimum scenario) and RM6.14 million (maximum scenario) for working capital. The estimated expenses for the exercise is RM1.4 million.
On the Pan Borneo Highway project, Bina Puri said RM258.8 million out of the RM601.8 million contract value had been completed, leaving the balance amount to be incurred (work in progress) of RM343 million. Bina Puri is the joint venture partner with PPES Works (Sarawak) Sdn Bhd, a subsidiary of Cahya Mata Sarawak Bhd (CMS), in undertaking one of the 11 work packages of the highway project worth RM1.36 billion.
Bina Puri’s portion involves road upgrading works for Bukit Sebangkoi section (37.3km) and Sarikei section (27.5km). The 1 Puri Commercial Centre, which has gross development value of RM57 million, involves the construction of 26 units of four-storey and five-storey shophouses along Jalan Tun Abang Haji Openg, near to the Sarawak General Hospital. The development cost incurred so far was RM24 million leaving a balance of RM16 million.
Bina Puri’s other domestic construction projects are Trengganu state government hotel, people’s housing programme in Pitas, Sabah, upgrading of federal road from Sungai Buloh to Assam Jawa, Selangor and electrified doubletracking project from Gemas to Johore Bahru. Its overseas construction projects are Malaysian embassy in Moscow, Russia and I am Fine condoninium in Bangkok, Thailand. The proposed rights issue, subject to all relevant approvals obtained, is expected to be completed in fourth quarter 2019.
