The private placement exercise will raise RM40.2mil for the company, to be utilised for working capital.
"In addition, the proposed placement will enable the company to onboard Ong as a substantial shareholder," IWCity said in a filing with Bursa Malaysia today.
IWCity said the emergence of Ong as a 5.9% stake owner "will serve as a confidence boost and commitment for the fundamental value of the group."
"The Proposed Placement will allow the Group to leverage on the well corporate network and experience of Ong to further improve the Group’ financial performance moving forward, which in turn is expected to create value to the shareholders of the Company," it added.
After the placement exercise, Tan Sri Lim Kang Hoo's stake in IWCity will be reduced from 37.72% to 34.29%.
IWCity is a property developer with several ongoing projects in Johor.
It owns more than 900 acres of prime waterfront land strategically located in the Iskandar Malaysia region in Johor.