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(SINGAPORE) High-end property developer Yanlord Land Group has proposed issuing new shares and convertible bonds (CBs) to raise some $503.8 million, confirming earlier media reports on the fund-raising.
The group said it intends to spend at least half of the net proceeds of $497.7 million to fund new development sites, investments and other strategic alliances. The remaining sum will be used for general working capital requirements.
This fund-raising exercise comprises the issue of 110 million new shares at $2.08 apiece and $275 million worth of convertible bonds (CBs) with a coupon rate of 5.85 per cent.
The CBs are due to mature in 2014 and have a conversion price of $2.6208, a 26 per cent premium to the issue price. If fully converted, the CBs would translate to 104.93 million shares, representing 5.7 per cent of the existing issued share capital.
The group has also granted the joint bookrunners an option to issue up to a further $100 million worth of CBs. If this option is exercised, total gross proceeds from the offering would be up to $603.8 million.
This upsize option on the CB may be exercised on or before the 13th business day following the closing on July 13 and may be exercised in whole or in part on one or more occasions.
The joint bookrunners are JPMorgan (SEA) Ltd and Royal Bank of Scotland subsidiary ABN Amro Bank NV, Singapore branch.
To facilitate the issue of new shares to subscribers, Yanlord Holdings Pte Ltd, through which group chairman and president Zhong Sheng Jian holds a controlling 23.29 per cent stake, has agreed to lend shares for the proposed share placement.
Concurrent with the placement, Yanlord Holdings Pte Ltd is also selling 10 million vendor shares, representing 0.55 per cent of the existing share capital at $2.08 apiece.
The issue price of $2.08 for the share placements is a 9.5 per cent discount to the weighted average price for trades done on the shares for the full market day on June 16.
Yanlord said the dual offering of shares and CBs has attracted strong interest from institutional investors globally, so the total offering of new shares and vendor shares was upsized from 100 million shares to 120 million shares.
Apart from the new CBs to be issued under this new offering, Yanlord still has an outstanding $338.3 million CBs that would mature in 2012.
Its shares slid when trading was resumed yesterday after a trading halt on Wednesday, and closed 1.3 per cent lower at $2.28.
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