Kuala Lumpur, 6 March: Mah Sing Group Berhad has on 3 March 2017 entered into agreements to establish a Senior Perpetual Securities Issuance Programme of up to RM1.0 Billion.
In a signing ceremony held in Kuala Lumpur, Mah Sing also announced that the first issuance amounting to RM650 million in nominal value to be issued out of the Perpetual Securities Programme, is expected to take place by end-March 2017.
Mah Sing was represented by its Group Managing Director Tan Sri Dato’ Sri Leong Hoy Kum and Executive Director Dato’ Steven Ng, while CIMB Investment Bank Berhad was represented by its Chief Executive Officer Dato’ Kong Sooi Lin and Global Head of Capital Markets, Puan Nor Masliza Sulaiman. The signing was witnessed by CIMB and CIMB Bank Berhad’s Non-Independent Non-Executive Director Dato’ Lee Kok Kwan. CIMB is the sole Principal Advisor, Lead Arranger and Lead Manager for the Perpetual Securities Programme and the Proposed Issuance.
The Proposed Issuance, which is perpetual in nature with a first call option date at the end of year 5 from issuance, will carry a semi-annual fixed rate coupon of 6.90% p.a. for the first 5 years. The proceeds from the issuance will primarily be earmarked to accelerate construction for projects with good take-up, landbanking and working capital. 2017 will see the expected final stage billings on delivery of vacant possession of properties amounting to approximately RM607 million which will further enhance the Group’s cash position.
“We are very pleased with the response to our Proposed Issuance which attracted mainly institutional investors as well as selected private wealth and private banking customers, showing the confidence they have in us”, says Tan Sri Dato’ Sri Leong.
Tan Sri Dato’ Sri Leong added “We are a growth minded developer and in terms of fund raising or financing options, we are guided by our capital management policy of not exceeding 0.5 times in net gearing and are also constantly exploring various options in balancing the interests of all stake holders. This programme is part of Mah Sing’s prudent financial management, as it helps the Group achieve a better balance between long term and short term financing, as well as fixed rate vs floating rate financing.”
The Group has charted strong growth with industry-leading asset turnover ratio of 49% on average for the past 5 years. It also achieved return on equity of 14% on average over the past 5 years, compared to peer average of 9% to 10%. In 2017, the Group will continue to deliver easily accessible, well planned projects with good concepts in strategic locations to meet market demand.
“As we have entered into the new financial year, we will continue to adopt a strategic approach and phase out our launches. The focus will be on accessible homes, with 73% of our residential sales target price point at RM700,000 and below,” said Tan Sri Dato’ Sri Leong.
“The oversubscription of the Proposed Issuance is a reflection of both ours and the investors’ confidence in Mah Sing”, added Dato’ Kong Sooi Lin.
Mah Sing anticipates the property market to improve in the second half of 2017. The Group expects the demand for property will continue to be supported by Malaysia’s resilient economy with continued GDP growth, young population as well as improvement in public transportation and infrastructure such as the LRT extension, MRTs and High Speed Rail.