Brief caption: Customers checking out the housing projects at the Mah Sing Group booth during Star Property Fair 2016 at Aman Central Mall, Alor Setar. Pix by GARY CHEN/The Star/16 January 2016.
KUALA LUMPUR: Property developer Mah Sing Group Bhd
is buying back all the outstanding redeemable convertible secured bonds (CBs) it has issued, totalling RM315mil in nominal value, for RM337.1mil.
It told Bursa Malaysia that the CBs repurchase allowed it to avoid issuing about 276.3 million Mah Sing shares, representing 11.5% of its existing paid-up share capital at Feb 12.
This call, which comes less than four months from the 5th anniversary redemption date, prevents a shareholding dilution for Mah Sing’s existing shareholders. Among them are the Employees Provident Fund (10.06% or 242.39 million shares), Lembaga Tabung Haji (4.97%), Retirement Fund Inc or KWAP (4.17%), Koperasi Permodalan Felda Malaysia Bhd (4.81%) and Amanah Saham Bumiputera Scheme (3.38%). (Except for EPF’s stake based on its latest announcement, the shareholding figures are from the 2014 annual report.)
Mah Sing noted that the CBs, which will be cancelled after the purchase, were currently “in-the-money” given the conversion price of RM1.14.
The market price of Mah Sing shares, based on Monday’s closing price, is RM1.25.
“Based on the purchase consideration of RM337.1mil and the conversion price of the CBs of RM1.14, the effective price per Mah Sing Share is RM1.22,” the company said.
This represents a discount of 11.07%, 5.65% and 3.63% to the 3-month, 1-month and 5-day volume weighted average market price of Mah Sing shares up to and including Feb 12 of RM1.3718, RM1.2930 and RM1.2659 respectively.
Mah Sing had issued RM325mil nominal value of seven-year redeemable CBs, with a coupon rate of 3.25% per year, in June 2011. Of those, RM10mil nominal value bonds were converted into 8.77 million shares in June last year.
The bonds may be redeemed on the 5th anniversary of the issue date (June 10, 2016) in whole or in part by cash and in one lump sum at par.
Mah Sing said the CBs repurchase was funded through the balance proceeds from the rights issue of new Mah Sing shares with warrants undertaken by it in February last year as well as its internally generated funds.
Mah Sing shares fell 1 sen to close at RM1.25 on Monday.
The Mah Sing Group booth at Star Property Fair 2016 in Alor Setar last month attracted a large crowd. Mah Sing has decided to call all its outstanding convertible bonds just months away from the 5th anniversary redemption date.
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