PETALING JAYA: Property developer Yong Tai Bhd is raising RM54.18mil from it’s Hong Kong based major shareholder through a private placement exercise.

Proceeds from the exercise would be used to part finance the purchase of 1.08 acres of land in Bukit Bintang, Kuala Lumpur, the company said in a statement yesterday.

Hong Kong-listed Co-Prosperity Holdings Ltd has agreed to subcribe to 43 new million shares in Yong Tai at RM1.26 each.

Upon completion of the placement, stake in Yong Tai will increase from 24.56% to 31.34%.

Yong Tai group chief executive officer Datuk Wira Boo Kuang Loon said that the decision of Co-Prosperity to increase its equity participation in the company demonstrated the shareholder’s commitment and confidence in Yong Tai’s business direction.

“The corporate exercise would further strengthen the net assets as well as the financial position of Yong Tai and enable the group to raise additional funds without incurring high borrowing cost,” he said.

The private placement, which is expected to be completed by the fourth quarter of this year, is subject to the approval of relevant authorities and Yong Tai’s shareholders, the statement added.

Meanwhile, in a separate filing with Bursa Malaysia yesterday, Yong Tai announced that it had terminated memorandum of understanding with Terrawest Resources Sdn Bhd for the proposed acquisition of 1.5 acres land in Puchong.