Amalgamation exercise to catapult Dijaya into the ‘big league’
Borneo Post , 07 March 2012
KUCHING: Dijaya Corporation Bhd (Dijaya), a company substantially owned by Tan Sri Datuk Danny Tan Chee Sing, yesterday announced the execution of an Amalgamation Exercise Agreement, which aims to streamline and rationalise majority of the lands and properties held privately by Tan into Dijaya.
The Proposed Amalgamation Exercise will catapult Dijaya into ‘the big league’, thus emerging as one of the largest property development companies on the Main Market of Bursa Malaysia Securities Bhd.
During the ceremony, Tan, who is also Dijaya group chief executive officer, said, “The asset portfolio mix for Dijaya will be further optimised after the proposed amalgamation exercise resulting in a more stable and recurring income, generated from the long-term lease arrangements attached to the injected investment properties.
“This exercise will firmly position Dijaya as one of the leading players in the property development and property investment market in Malaysia.
“As a start, we will be able to venture further towards a more diversified properties and assets portfolio, covering more land areas and key demographics areas in Klang Valley, Penang, Johor and Sabah.”
Upon completion of the Proposed Amalgamation Exercise, the size of the landbank would increase to 870 acres and the Gross Development Value (GDV) would increase to RM37 billion. In addition, the investment properties’ lettable areas wouldl increase to 1.4 million square feet.
The additional investment properties to be acquired from the private property companies were estimated to generate a more stable and recurring income for Dijaya.
Under the Proposed Amalgamation Exercise, Dijaya would acquire 73 properties held privately by Tan for a total consideration of approximately RM948.7 million, to be satisfied by RM250 million cash and the balance via the issuance of a 10-Year two per cent coupon Dijaya Redeemable Convertible Unsecured Loan Stock (RCULS), with a staggered conversion price range of RM1.30 to RM2.50 over a 10-year period.
The purchase consideration took into account the adjusted net assets of the various companies and the indicative aggregate market value of the property assets of approximately RM1.1 billion as appraised by the independent professional valuers.
As an integral part of the proposed amalgamation exercise, Dijaya would undertake an equity fund raising exercise via a renounceable rights issue of up to 491,302,655 new ordinary shares of RM1 each in Dijaya at an issue price of RM1.20 per rights share, together with a bonus issue of up to 122,825,664 new ordinary shares of RM1 each in Dijaya (bonus shares) to be credited as fully paid-up, on the basis of four rights shares for every five existing Dijaya shares held and one Bonus Share for every four rights shares subscribed.
Tan and the parties related to him would provide Dijaya with undertakings to subscribe for RM250 million in values pursuant to the Proposed Rights Issue, which would constitute the minimum subscription level for the Proposed Rights Issue.
To further meet the business investments and long-term capital requirements of the Group, Dijaya also proposed a debt funding via the issuance of up to RM500 million guaranteed commercial paper/medium term notes programme (CP/MTN) with an option to issue detachable warrants.
AMALGAMATION EXERCISE: (From left) Dijaya executive director Koong Wai Seng, Dijaya managing director Datuk Tong Kien Onn, Astramina Advisory managing director Wong Muh Rong, Tan, RHB Investment group chief executive officer Mike Chan, AmInvestment Bank managing director of Corporate and Institutional Banking Pushpa Rajadurai and Dijaya deputy managing director Dickson Tan during the ceremony.