CAPITALAND is considering a rights issue to raise about $1.5 billion, by offering one new rights share for every four existing shares at $2.20 each, people familiar with the situation said on Friday.
“The consideration is for the capitalincrease to take place around mid-February, but there is no firm decision,” one person said.
The Singapore-listed developer revealed on Friday that it had received “various proposals” for fund raising, including for a rights issue, but it had not made any decisions.
CapitaLand had about 2.8 billion shares outstanding and $4.2 billion in cash and cash equivalents at Sept 30 last year.
Analysts say CapitaLand isn’t in need of capital, but raising more money would allow it to buy distressed assets in attractive markets and put the company in a better position to face challenges in the current property market.
The sector in Singapore and the region has cooled considerably since last
CapitaLand chief executive Liew Mun Leong (picture) has said the company could consider acquiring some distressed real estate companies in Asia, including China and Australia.
If the issue takes place, it would be the second major Singapore company to raise money through a rights issue in recent months.
Last month, DBS Group Holdingsannounced a $4-billion right issue to bulk up its capital base.
Source : Today – 24 Jan 2009