SP Setia aims to raise up to RM1.2b for expansion

PROPERTY developer SP Setia Bhd's proposed private placement of up to 15 per cent of its paid-up capital is expected to raise up to RM1.2 billion to fund its existing and future expansion.

"We hope to raise between RM1 billion to RM1.2 billion from the proposed private placement," president and chief executive officer Tan Sri Liew Kee Sin said after SP Setia's extraordinary general meeting (EGM) in Shah Alam yesterday.

The exercise would only dilute minimally the company's share capital base, he added.

Liew plans to maintain his shareholding after the exercise. although another major shareholder, the Employees Provident Fund, wanted to raise its stake "a little bit more".
"We cannot speculate on the shareholding spread of these major shareholders," he said.

The EPF is its second largest shareholder with a 14.95 per cent stake as at December 30. Skim Amanah Saham Bumiputera is the largest, with a 20.11 per cent stake. Liew owns 9.19 per cent.

SP Setia said the private placement would involve a bookbuilding exercise, which includes a roadshow involving about 30 global funds.

At the EGM, shareholders approved the proposed placement and bonus issue on a one-for-two basis after the placement.

"This (private placement) will provide us with ample funds to strongly launch three sizeable new projects without having to forego exciting new landbanking opportunities which may come our way," Liew said.

The three major projects planned for launch this year are the KL Eco City - which is opposite the MidValley - Setia City in Setia Alam in Shah Alam and Fulton Lane in Melbourne. They have a combined gross development value of RM12.5 billion.

The group is also negotiating with the government on a swap deal to buy 16.2ha of prime land in Bangsar in exchange for a new health and research complex on a 22.28ha site in Bandar Setia Alam.

"Apart from projects which are already in the pipeline, we are still aggressively scouting for good landbank to lock in future growth," said Liew, adding that SP Setia has 1,494ha of undeveloped land at the moment.

Liew said SP Setia has achieved a quarter of its yearly target sales of RM3 billion in the first quarter ended January 31 2011.

"We are off to a running start on our current year sales target with RM737 million sales already locked in," he said.

By Business Times