Keppel Land to boost capital through rights issue

Property developer Keppel Land has become the latest company here to boost its capital through a rights issue.

It is seeking to raise some S$712 million by issuing about 653 million new ordinary shares.

Under the rights issue, holders will be offered nine rights shares for every 10 existing ordinary shares.

Each rights share would be sold at a price of S$1.09, a 42 per cent discount over Thursday’s closing price of S$1.88.

Keppel Land said on Friday the rights issue is aimed at strengthening its balance sheet and proactively enhancing its financial flexibility.

Between 80 and 100 per cent of the money raised will be used for development expenditure, capital management and acquisitions. The rest will be used for corporate and working capital purposes.

In a show of support, the developer’s parent company, Keppel Corp, has pledged to subscribe all its rights issue.

Keppel Corp, which holds 52.6 per cent of Keppel Land, will also subscribe up to 90 per cent of the total number of Balance Rights Shares.

Earlier this week, Keppel Land reported that its first quarter net profit fell 39 per cent on-year to S$36.9 million.

Source : Channel NewsAsia – 24 Apr 2009

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