S P Setia proposes RCPS-i C issuance to raise up to RM1.18bil proceeds

KUALA LUMPUR: SP Setia Bhd has proposed to undertake a renounceable rights issue of new class C Islamic redeemable convertible preference shares (RCPS-i C) to raise gross proceeds of up to RM1.18 billion.

The proceeds would be used to finance the redemption of all the outstanding RCPS-i B which were issued on Dec 29, 2017 and bears a preferential dividend rate of 5.93 per cent, the property developer said in a filing with Bursa Malaysia today.

"The issuance of the RCPS-i C will enable the company to secure funding of up to RM1.18 billion at preferential dividend of 5.43 per cent per annum, redeemable at the option of the company, on or after the fifth anniversary of the issue date,” it said.

It said SP Setia would also facilitate the implementation of the proposed rights issue and has proposed to amend the constitution of the company.

On prospects, SP Setia said it anticipated gradual improvement to the Malaysian economy, underpinned by the continued increase in global demand and higher private sector expenditure.

"The headline inflation is expected to edge marginally upwards due to the disruptions caused by the global supply chain.

"However, the improvement in overall income, employment conditions and consumer sentiments are expected to lift household spending which augurs well for the property sector,” it said.

It said in view of these positive sentiments, the company intended to roll out RM4 billion worth of new launches in the financial year ending Dec 31, 2022, focusing primarily on landed residential projects, among others, in Setia Alam, Setia Alam Impian, Setia Bayuemas, Bandar Kinrara, Setia Safiro, Setia Mayuri and Setia EcoHill 1 and 2.

At the same time, it said the company intended to continue to reduce its unsold completed properties, which stood at RM1.03 billion as at Dec 31, 2021, through the implementation of diverse marketing strategies.

On the international front, it would focus on Australia and Vietnam as these markets have provided the company with good returns to capital.

It said the proposed amendments would not have any effect on the company’s issued share capital, consolidated net assets per share and gearing, substantial shareholders’ shareholdings in the company, consolidated earnings per share (EPS) and convertible securities of the company.

"As the proposed rights issue is expected to be completed in the fourth quarter of 2022, it is not expected to have any material effect on the earnings and EPS of the group for the financial year ending Dec 31, 2022,” it said.

However, it said it might result in dilution of the EPS of the company arising from the increase in the number of shares in issue as and when the RCPS-i C are converted into new shares. - Bernama