Trive plans RM60.5mil share issuance to Macquarie Bank

FILE PHOTO: The logo of Australia's biggest investment bank Macquarie Group Ltd adorns a desk in the reception area of their Sydney office headquarters in Australia, October 28, 2016. REUTERS/David Gray/File Photo

KUALA LUMPUR: Trive Property Group Bhd plans to raise as much as RM60.5mil by issuing up to 500 million new ordinary shares to Macquarie Bank Ltd.

It is assuming that the 500 million subscription shares, representing 37.41% of Trive shares as at May 23 and up to 27.22% of the enlarged number of issued Trive shares, will be issued at 12.1 sen each.

The property development and construction firm told Bursa Malaysia that apart from the expenses in relation to the exercise, all the proceeds would be used to fund Phase 1 of the development of the Bandar Baru Kertih Jaya township in Kemaman, Terengganu.

Trive, which has financed RM30mil of the township’s RM90mil gross development cost via proceeds from an earlier private placement exercise, requires RM60mil more.

It said any shortfall in the targeted RM60.5mil to be raised from the proposed share issuance would be covered by progressive sales billings to be received during the course of development period, internally generated funds and/or bank borrowings. 

Macquarie Bank, which will end up with 25.9% to 27.2% of Trive’s enlarged share capital if it subscribes in full, does not intend to be the controlling shareholder of Trive.

Under the subscription agreement inked on Wednesday, Macquarie Bank undertakes and warrants, among others, not to buy or subscribe to Trive shares to the extent that it would be required to make a take-over offer for the rest of Trive shares and other securities it doesn’t own.

Trive said that although tits earnings per share would be diluted as a result of the increase in number of shares to be issued, the proposed share issuance was expected to contribute positively to its earnings thereafter through the utilisation of the proceeds.

The proposed share issuance is expected to be completed within 24 months from the start of the subscription period.

The counter closed half a sen lower at 12.5 sen on Wednesday with 1.63 million shares traded during the day.