A model of Splash Park Suites and water theme park to be developed by Tanco Holdings Bhd in Port Dickson, Negeri Sembilan.
KUALA LUMPUR: Loss-making property developer Tanco Holdings Bhd
has proposed a share par value reduction and the issuance of redeemable convertible commercial papers and/or notes with an aggregate principal amount of up to RM100mil in order to raise funds.
In a filing with Bursa Malaysia, the company said its shares had been trading below its existing par value of 20 sen in the past 12 months at an average price of 14 sen, which is not conducive for it to do a fund-raising exercise involving the issuance of new shares.
It proposed to reduce the par value of each Tanco share from 20 sen to 5 sen and the cancellation of 15 sen would give rise to a credit of RM50.23mil, which will be credited to the company’s capital reserve account.
Tanco also proposed a notes issuance to raise gross proceeds of up to RM100mil.
It has allocated the biggest portion (RM79.6mil) for the Splash Water Theme Park and Suites - a water theme park with adjoining service suites - which is part of Tanco’s 400-acre integrated resort development in Port Dickson called Dickson Bay.
According to Tanco, sales of the serviced apartments under Phase 1 of the Splash Park project are expected to generate revenue of RM148mil, and the company has so far secured about RM90mil in sales.
Tanco intends to utilise the RM79.6mil to facilitate the completion of phase 1, expected by the second quarter of 2018.
Tanco is allocating RM5.5mil more of the proceeds for acquiring an adjacent parcel of land as part of its Dickson Bay master plan. This, it said, was to allow for better planning of the internal road circuits as well as to facilitate a more comprehensive wellness zone layout.
Tanco already has identified a subscriber for the notes, so the notes will not be underwritten. On Wednesday the company signed a conditional subscription agreement with Advance Opportunities Fund and Advance Capital Partners Pte Ltd (ACP), both of which having Tan Choon Wee as sole director,
Advance Opportunities Fund, the subscriber, agreed that there would be no conversion of the notes to transfer a controlling interest in Tanco to it without the prior approval of Tanco’s shareholders at a general meeting and agreed also not to hold more than 10% interest in Tanco’s issued share capital at any time without the company’s prior approval.
Tanco made losses in the last three financial years. For the financial year ended Dec 31, 2015, it recorded a loss of RM4.95mil on revenue of RM3.46mil.
Tanco shares closed unchanged on Wednesday at 11.5 sen.
Limited time offer:
Just RM5 per month.
