KUALA LUMPUR, June 2 — Damansara Realty Bhd (DBhd) will raise up to RM150 million by issuing redeemable convertible notes to spur its property development opportunities in the country.
In a statement Thursday, DBhd said it would issue the unsecured and non-guaranteed notes in four main tranches to the Advance Opportunities Fund I (“AOF”), an open-ended fund established in the Cayman Islands.
“The notes are due in 2019 and will pay an annual interest of 0.1 per cent. We will raise RM20 million in the first tranche by the second half of 2016, RM30 million in the second and RM50 million each in the third and fourth tranches.
“The notes can be converted into ordinary shares of DBhd. Based on the minimum conversion price of 50 sen, which is the par value of DBhd’s shares, the maximum number of conversion shares to be issued will be 300 million,” it said.
DBhd said Advance Capital Partners Asset Management Private Limited would be AOF’s discretionary investment manager.
Meanwhile, DBhd intends to use RM87.1 million of the proceeds to develop projects in Putrajaya, Kuantan and Johor Baharu.
“In Putrajaya, we will develop 1,350 residential units and 45 commercial units at a gross development cost (GDC) of RM467.3 million.
“The Kuantan project involves 49 linked and semi-detached units with a GDC of RM42.6 million, while in Johor Baharu, we want to develop 50 shoplots in Damansara Aliff,” it said, adding DBhd expects to use RM50.9 million of the proceeds for working capital.
It recently secured a cleaning services contract at the Kuala Lumpur International Airport and is actively tendering for new projects in areas such as parking operations, hospital planning and facility management.
In 2014, DBhd underwent a corporate restructuring which saw the entry of Seaview Holdings Sdn Bhd as controlling shareholder following its acquisition of a 51 per cent stake from state investment agency Johor Corp.
“Apart from strengthening our balance sheet, the notes gives us the flexibility to drawdown funds when we need it.
“The funding comes at a critical juncture which will accelerate the growth of our property arm even as we expand our project management division,” Group Chief Executive Officer Mohd Fazlin Shah Mohd Salleh said.