Benalec proposes RM200m convertible bonds to fund reclamation

KUALA LUMPUR: Benalec Holdings Bhd has proposed to issue up to RM200mil convertible bonds, of which RM146mil would be use for land reclamation projects.

The company said on Friday it planned to issue up to RM200mil nominal value of seven-year redeemable convertible secured bonds.

Benalec said the bonds might be issued on a direct or private placement or a bought deal basis or book running on a best effort basis without prospectus to investors.

“The convertible bonds are convertible into new ordinary shares of 25 sen each in Benalec at the option of the holders of the bondholders at any time after the issue date of the bonds and up to the maturity date,” it said.

It added the conversion price would be at a premium of between 15% and 20% over the five-day volume weighted average market price (VWAMP) of Benalec shares on a price-fixing date to be determined later by the board. 

Benalec said assuming that the convertible bonds were fully converted at RM1.05, or above 15.38% over the five-day VWAMP of Benalec shares up to and including Sept 11 of about 91 sen, the bonds would be convertible into 190.47 million new Benalec shares representing about 23.83% of its paid-up. This would exclude the 12.15 million shares held as treasury shares.

As of March 20, Benalec group had entered into sale and purchase agreements to dispose of 128.52 acres of land for RM235.129mil which have been or would be reclaimed by the group.

The group has also secured land reclamation contract covering 415 acres of land, which was expected to provide the group with a stable stream of revenue over the next three years.