KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) shareholders today approved of a rights issue proposal that would raise up to RM2.86 billion.
“More than 89 per cent of shareholders voted in favour of the rights issue," said chief corporate officer Amarjit Singh Chhina.
“From here, we will proceed with price-fixing in mid-August and submit the prospectus to the Securities Commission for approval. We expect to complete this by end of September,” he told reporters after the company's extraordinary meeting held here today.
Also present were chief operating officer Kwan Joon Hoe and chief financial officer Ann Wan Tee.
MRCB is undertaking renounceable rights issue of up to 2.86 million new ordinary MRCB shares together with free detachable warrants.
This is on the basis of one rights share for every existing MRCB share held and one free warrant for every five rights shares subscribed. This means MRCB’s share capital would double and earnings per share would be diluted accordingly.
Amarjit said MRCB's market capitalisation is expected to expand to the league of US$1 billion. "Hopefully, this would spark interest and boost MRCB’s foreign shareholding, which currently is less than 10 per cent."
When asked how money raised would be used, he replied that at least a third of the proceeds amounting to RM975 million will be advanced to MRCB’s 85 per cent-owned unit Rakan Juang Sdn Bhd to upgrade facilities at the National Sports Complex in Bukit Jalil, Kuala Lumpur.
Phase 1 of the development (also known as Project 1) is being completed in time for the SEA Games, next month.
Phase 2, which kicks off in January 2018 involves the upgrading of the National Stadium (adding a retractable roof, retractable seats, comfort ventilation and track resurfacing) and the design and construction of a sports complex, sports mall, convention centre, a multi-storey car park, hostels, sports museum, library, and youth park.
Ann then noted that MRCB, which has a gearing of 0.9 times, as at end-March 2017, plans to set aside RM826.32 million to pare down gearing to 0.7 times after the right issue.
He also said the group would save RM46.69 million in annual gross interest based on the group’s weighted average effective interest rate for its borrowings of about 5.65 per cent per annum in 2016.