CapitaLand to raise S$1.84b through rights issue

Singapore developer CapitaLand announced Monday that it will raise S$1.84b through a rights issue.

It says eligible shareholders will be entitled to subscribe for one new ordinary share for every two existing ordinary shares held as at the book closure date of 23 February, at S$1.30 per rights share.

The company said the rights issue is a strategic initiative that is consistent with its policy of proactive capital management.

The rights issue is expected to significantly enhance the Group’s financial flexibility and competitive position.

It will be underwritten in full by the joint lead managers and joint underwriters, namely DBS Bank, J.P.Morgan and Merrill Lynch.

CapitaLand shareholder, Fullerton – which is wholly-owned by Temasek Holdings – has undertaken to subscribe for its pro rata entitlement of the rights shares.

Fullerton has a direct interest in approximately 39.68 per cent of CapitaLand’s current issued share capital.

Separately, CapitaMall Trust Management, which manages CapitaMall Trust, also announced a fully underwritten renounceable 9-for-10 rights issue to raise gross proceeds of some S$1.23b.

The issue price is 82 cents per new unit in CapitaMall Trust.

The gross proceeds from the rights issue will be used mainly to repay borrowings due in 2009 amounting to S$956.2m.

The balance will then be used to pay for committed asset enhancement initiatives, as well as for general corporate and working capital purposes.

CapitaLand brought forward its earnings announcement by a day to Monday and suspended trading in its shares the same day.

CapitaLand posted fourth-quarter net profit of S$78m for the three months ended 31 December 2008, down from S$674.7m in the previous corresponding period.

For the full year, CapitaLand registered a net profit of S$1.26b, down from the S$2.75b profit recorded in FY2007.

CapitaLand says it is the third consecutive year that net profit has surpassed the S$1b mark.

Revenue was also down, from S$3.79b in FY2007 to S$2.75b last year.

The company says this is due to lower sales revenue from development projects in Singapore, China and Australia.

CapitaLand says its multi-sector business model and prudent capital management will enable it to ride out the global financial storm.

It has also proposed a first and final dividend of 5.5 cents per share and a special dividend of 1.5 cents per share for FY2008.

Source : Channel NewsAsia – 9 Feb 2009

Join The Discussion

Compare listings