S P Setia fundraising exercise is best in show

S P Setia Bhd’s RM3.3 billion non-IPO fundraising exercise that consisted of rights issue of shares, rights issue of redeemable convertible preference shares (RCPS-i B) and a private placement is the best non-IPO fundraising via equity. 

The Edge reports that the RM3.3 billion raised is mainly earmarked for the acquisition of I&P Group Sdn Bhd, the largest real estate follow-on equity deal in Malaysia this year. 

Maybank Investment Bank is principal adviser, managing underwriter, joint global corrdinator, joint placement agent and joint bookrunner for this deal.

It is also the largest real estate rights issue in the history of corporate Malaysia, succesfully raising RM1.068 billion on Jan 4, 2018. 

Total of 403.26 million rights shares were issued, reports the publication, on the basis of two rights shares for every 15 existing shares held. 

Priced at RM2.65 each, it represented a discount of 20.2% to the theoretical ex-rights price of RM3.32 per share. 

Strong support was received by major shareholders Permodalan Nasional BHD (PNB), and its funds, which provided an undertaking to subscribe in full to their entitlements under the rights issue.

The rights issue was oversubscribed by 8.2%, indicating a strong response from entitled shareholders.

RM1.06 billion was also successfully raised through 1.21 billion rights issue of RCPS-1 B, on the basis of two RCPS-i B for every five existing shares held. 

PNB and its funds subscribed in full to their entitlement, 65.6% of the offering, and an excess undertaking of up to a maximum of RM340 million in value of RCPS-i B. 

The publication reports that most of the net proceed from the rights issue of ordinary shares and rights issue of RCPS-i B were used to part finance the acquisition of I&P Group for a purchase consideration of RM3.65 billion. 

S P Setia also raised RM997.8 million through a private placement of RM325 million new shares on Feb 9, representing 9.5% of the existing share capital of S P Setia and 8.7% of the enlarged share capital of the company. 

It is the largest real estate sector placement exercise in the history of the country. And the shares were offered at the price range of RM3.07 to RM3.11 per share, a discount of 4.6% to 5.8% to S P Setia’s five-day volume weighted average price on Jan 29m 2018. The book closed within 2.5 hours after its launch and received demand of RM1.4 billion in value, which works out to 1.4 times cover at RM3.07 per share. 

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