KUALA LUMPUR: I-Berhad’s renounceable rights issue and offer for sale of irredeemable convertible unsecured loan stocks (ICULS) have been oversubscribed by eight per cent and 12.8 per cent, respectively.
It received 1,908 applications for 309 million rights shares with a total value of RM213.2 million, representing an excess of 22.8 million shares, or eight per cent, over the allotment of 286.2 million rights shares.
The rights issue comes with 57.2 million five-year detachable warrants, on the basis of five rights shares for four existing shares at 69 sen per share, and one warrant for every five rights shares subscribed.
The company also saw 1,540 applications for 326 million ICULS worth a total of RM163 million.
This represents an excess of 36.9 million ICULS applications, or 12.8 per cent, over the allotment of 289.1 million ICULS.
The ICULS were offered for sale by Sumurwang Sdn Bhd to I-Berhad’s minority shareholders, on the basis of five ICULS for every one existing share held.
“The oversubscription is a good reflection of our shareholders’ confidence in the group’s growth plans,” said deputy chairman Datuk Eu Hong Chew.
“We believe that the double-digit growth achieved over the past few quarters as well as the bright outlook for I-Berhad have contributed to this confidence,” he said in a statement yesterday.
According to Eu, the corporate exercise had a two-pronged objective of ensuring that the group remains financially strong as it builds up its investment property portfolio, and at the same time enhancing shareholders’ returns.
“The corporate exercise is also intended to create shareholders’ returns by enhancing our valuation multiple. In this context, we are making the share price affordable with the share split,” he said.
“We are also increasing the free float of shares, so that the public spread will increase from 25 to 40 per cent. This will also give us an opportunity to attract more institutional investors at the end of the exercise,” he added.
Eu said the company’s recent announcement of a 30 per cent dividend payout policy is another component of the institutional investors requirement plan.
“To meet the institutional investors’ requirements, we are even prepared to have a public shareholding spread of 49 per cent,” he said.
Upon the completion of the corporate exercise, I-Berhad will see its shareholder funds increase to RM1 billion and its paid-up capital to 1.4 billion shares of 50 sen par, compared with its pre-exercise paid-up capital of 114 million shares of RM1 par.