“The revised plan was designed to address two issues: the need to get Ho Hup out of the PN17 status and to allow all substantial shareholders the opportunity to remain as substantial shareholders in Ho Hup post-restructuring,’’ managing director Lim Ching Choy told StarBizWeek in an interview yesterday.
Yesterday, Ho Hup announced that it had applied to the exchange for a three-month extension from Feb 4 to submit a revised regularisation plan.
Lim said the revised scheme was “different” in structure from the original plan, but the ultimate goal remained the same – “to clean up the company’s balance sheet and to enable it to move forward.”
The latest development came amid heightened tension between Ho Hup’s top two biggest shareholders.
Ho Hup’s second-biggest shareholder and former managing director, Datuk Low Tuck Choy, had called for an EGM on Feb 4 in a bid to replace the majority of the group’s existing board with six new appointees.
One of his main grouses against the current board led by deputy executive chairman Datuk Vincent Lye was over the company’s original regularisation plan that was submitted on Oct 30 last year.
Low had even came out with his own plan to revive the ailing builder, although he said in a recent interview that he was not going to be involved in active management of the company his father had founded.
The revised scheme calls for shareholders to take a 60% capital reduction from the par value of every share held, which was significantly lower than the original plan for 95% cut. Ho Hup’s current paid-up capital stands at RM102mil.
Also more rights shares, up to 30 million units to be sold at RM1 each, would be made available to existing shareholders post capital reduction. This is against the 12.75 million rights shares offered under the old scheme.
Only 10 million new RM1 shares are to be placed out to investors to unidentified investors, against a total of 26.25 million shares planned previously.
Lim said the company needed to raise at least RM40mil in cash under the revised regularisation plan to have enough cashflow and jumpstart its property project at the 60-acre site in Bukit Jalil, Selangor.
“If the rights shares are not fully subscribed for by the shareholders of the company, the balance of the shares not subscribed would be placed to investors,” he said.
The revised plan also provides an option for shareholders to reject the capital reduction plan as a whole, but this would come at a price of losing a chunk of the group’s prime landbank in Bukit Jalil.
“What we hope to do is to keep the landbank intact in the company and raise enough money to develop it,’’ Lim said.
He estimated the gross development value of the land at RM1bil.
Ho Hup declined 4 sen to close at RM1.19 yesterday on volume of 400,600 shares.
By The Star
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