Guocoland to raise $532m in rights issue

Real estate developer GuocoLand said on Friday that it would launch a 1-for-3 rights issue to raise about $532.5 million to strengthen its capital base and fund expansion. The company will sell 296 million shares at $1.80 apiece, a discount of approximately 15.9 per cent from the shares’ closing price of $2.14 on Thursday, the last trading day before the announcement.

“The company is raising capital as part of its strategic initiative to strengthen its balance sheet and enhance the financial flexibility of the company and its subsidiaries … to pursue attractive opportunities for its business in the countries in which it operates,” GuocoLand said.

The developer said on Friday that it earned $134.3 million in the year ended June 30, turning around from a $70.2 million loss in the previous year, as revenue surged 43 per cent to $732.8 million. In the fourth quarter, it earned $52 million, turning around from a $73.1 million loss, as revenue jumped 19 per cent to $165.8 million.

The stellar performance was mainly due to recognition of profit from strong sales in China, where its Ascot Park, a 1,112 unit development in Nanjing, had been fully sold.

It has also sold an office block and 81 per cent of Soho units in GuoSon Centre Changfeng in Shanghai. In Singapore, Guocoland said it recorded robust sales in Sophia Residence, Elliot at the East Coast and Goodwood Residence.

Source : Today – 28 Aug 2010