“Under the current property market condition, Asian Pac is of the view that there are opportunities abound in choice locations and areas with growth potential in the Klang Valley, Kota Kinabalu, Johor and Penang,” it said.
However, the company has not started to actively negotiate with respective land owners in these areas, as it expects to be in a stronger position to negotiate with funds in place.
Asian Pac is proposing to issue up to RM99.26mil nominal value of 5-year, 3% irredeemable convertible unsecured loan stocks (Iculs) based on one Iculs and two free detachable warrants for every 10 Asian Pac shares held.
The Iculs are issued at 100% of its RM1 nominal value each, and each Iculs can be converted into five Asian Pac shares.
The proposed exercise will be undertaken based on a minimum subscription level. The minimum level is to raise minimum gross proceeds of RM65mil.
In order to ensure that the group is able to meet its funding requirements, the company has proposed to approach its single largest shareholder, Mah Sau Cheong, who has an 18.87% stake together with his spouse, to provide the irrevocable undertaking and additional undertaking to subscribe for RM65mil nominal value of Iculs at 100% of its nominal value.
Assuming that none of the other entitled shareholders subscribe for their entitlements, Mah’s direct interest in Asian Pac will jump from 18.34% to more than 33% (45.3% based on the maximum number of Iculs being subscribed) on full conversion of the Iculs and full exercise of the warrants.
Mah will apply to the Securities Commission for a waiver from having to make a mandatory general offer for the rest of the shares, convertible securities and new Asian Pac shares to be issued arising from the Iculs conversion or the exercise of the warrants.
Of the gross proceeds, the company is allocating the bulk (RM53mil to RM62.55mil) for acquiring land and most of the rest for working capital, including to undertake road works to improve traffic flow at Imago Shopping Mall in Sabah.
Following the exercise, Asian Pac’s paid-up capital will increase from RM198.51mil currently to between RM289.51mil and RM337.47mil.
Asian Pac said the proposals were expected to be completed in the fourth quarter of this year.
Asian Pac shares closed 1 sen higher at 18.5 sen on Monday with 5.128 million shares changing hands.