Keppel Land raising $712m

KEPPEL Land announced a cash call yesterday to raise $712.3 million to bolster its capital base and prime its war chest so it can swoop on any acquisition opportunities.

The property developer - about 53 per cent owned by conglomerate Keppel Corp - will offer shareholders nine shares for every 10 held at $1.09 each.

This is a 42 per cent discount to Thursday's closing price of $1.88 a share.

Parent Keppel Corp has indicated that it will fully subscribe to its allocation as a show of support.

'The current macro environment will present attractive opportunities in the real estate sector across Asia,' Keppel Land said in a statement yesterday.

'The rights issue is a strategic initiative to further strengthen the company's balance sheet and proactively enhance its financial stability.'

The company has said it has a strong capital position, but the issue will 'provide additional financial flexibility to pursue strategic opportunities in its core markets, as and when opportunities arise'.

The developer plans to use at least 80 per cent of the issue's net proceeds to pursue strategic acquisition opportunities, development expenditure and capital management, while up to 20 per cent will be used for general corporate and working purposes.

As of March 31 this year, the company had cash of $627.3 million. The rights issue will improve Keppel Land's debt-to- equity ratio from 0.52 to 0.22.

YANG HUIWEN