KUALA LUMPUR: SP Setia Bhd is raising nearly RM997.75 million through a private placement of 325 million new shares at RM3.07 each.
The property developer told Bursa Malaysia that it had completed the book-building exercise for the share placement.
The book-building attracted demand from local and foreign institutional investors.
Affin Hwang Capital said the nearly RM1 billion raised could reduce SP Setia’s existing gearing level by 10 percentage points to 27 per cent.
The amount can also be funded for its ongoing developments with a total gross development value of RM111 billion, the firm added.
“The private placement is reasonably priced, given the offer price of RM3.07-RM3.11 is at a 33-34 per cent discount to our real net asset value/share of RM4.65,” Affin Hwang said, adding that it had kep its “hold” call given the limited upside to its target price of RM3.25.
SP Setia, in the Bursa filing, said the placement share represented a discount of about 5.8 per cent to its shares’ five-day VWAP of up to January 29 of RM3.2607.
“The total number of placement shares to be issued pursuant to the book-building exercise is 325 million placement shares, representing 9.5 per cent of its issued share capital as at January 29,” it added.
Maybank IB and BNP Paribas, acting through its Singapore branch, are the joint placement agents for the placement.
Trading of SP Setia shares and related structured warrants were halted for one hour from 9am today. At the close of market, the stock eased 14 sen to RM3.11.