TA Enterprise aims to list property arm in Q1

PETALING JAYA: TA Enterprise Bhd expects to list its property arm TA Global Bhd on the main board in the first quarter of next year following the Securities Commission’s approval recently.

Managing director and chief executive officer Datin Alicia Tiah said the group was arranging with the underwriters on the portion of shares to be allocated to bumiputras.

“Initial public offerings (IPOs) in recent times were not fully subscribed.

“I think we would need to see how we are going to allocate the bumiputra portion following the Government’s relaxation of the rules,” she said.

The Government recently announced that it was relaxing the minimum 30% bumiputra equity requirement for public-listed firms. TA Enterprise had earlier targeted to list TA Global by next month.

TA Global’s listing exercise involves a proposed rights issue of 860 million new shares and a public issue of 350 million new shares at 50 sen per share.

TA Enterprise had earlier proposed to sell 875 million TA Global shares to bumiputra investors. It also proposed a capital distribution to shareholders via a share capital reduction from RM1 per share to 50 sen.

The proceeds from the proposals would total RM437.5mil. TA Enterprise is expected to recognise a capital gain of RM924.9mil.

Although the group is cash-rich, Tiah said, it would still want to raise more funds through an IPO because it needed more cash to buy assets at this time as the prices of properties were easing.

As of July 31, the group’s net cash and cash equivalents totalled RM451mil.

“We would still need more cash if we were to buy assets overseas.

“For investments in Australia, the weakening Australian dollar vis-a-vis the ringgit would enable TA Global to buy more properties there,” she said.

It currently owns Radisson Plaza Hotel in Sydney that had an average occupancy rate of 82% in July and a market value of A$120mil.

“Everything is at a discount now and I would say there’s about 25% discount from currency gains due to the strengthening of the ringgit (against the Australian dollar),” she said.

Furthermore, Tiah said, it was a good time to buy properties now because many prime properties held by hedge funds are available following a massive redemption by hedge funds.

“That is why this IPO is very important to us. If we are successful in raising the money, this would create an opportunity for the group to buy good assets with highly discounted prices,” she said.

Meanwhile, deputy chief executive officer Tiah Joo Kim told StarBiz that TA Global would launch an international brand for the newly acquired RM107mil Coast Whistler hotel by the first half of next year.

He said the group would develop hotels that carried its own brand, complete with different concepts and themes.

“We want to study the market segments and create different themes and concepts to suit the different market segments,” he said, adding that the acquisition of Coast Whistler would be completed by next month.

Joo Kim said TA Global would also develop a mixed development project worth some RM1.27bil on 3.3 acres at the corner of Jalan Imbi and Jalan Bukit Bintang, Kuala Lumpur.

By The Star (by Shannen Wong)