Kerjaya Prospek Property Bhd has unveiled plans to strengthen its financial position through a rights issue of convertible securities, aiming to raise up to RM324.88 million for expansion and debt reduction. The Malaysian property developer will offer up to 1.16 billion redeemable convertible unsecured loan stocks (RCULS) at 28 sen each, with shareholders receiving two RCULS for every existing share held.
The funds will primarily support ongoing and upcoming property projects, with RM273.73 million allocated for development and RM50 million earmarked for bank loan repayments. This move is expected to reduce the company’s gearing ratio from 1.22 times to 0.66 times while generating annual interest savings of RM2.18 million. The remaining RM1.15 million will cover administrative expenses related to the issuance.
Major shareholder Javawana Sdn Bhd has committed to subscribing for at least RM227.28 million worth of RCULS, ensuring the minimum subscription level is met. If fully converted, this would increase Javawana’s stake in Kerjaya Prospek from 74.11% to 89.57%. The company’s executive chairman, Datuk Seri Tee Eng Ho, along with his family members, holds indirect control through Javawana.
Maybank Investment Bank has been appointed as the principal adviser for the rights issue, which carries an eight-year tenure and a 4.2% coupon rate. The conversion price will be determined later, though preliminary estimates suggest a 29.06% discount to the theoretical ex-rights price. The proposal comes as Kerjaya Prospek seeks to optimize its capital structure amid ongoing property development commitments.