Dijaya in amalgamation deals worth RM950mil

PETALING JAYA: Dijaya Corp Bhd has entered into agreements with several vendors for a proposed acquisition of 73 properties, comprising 49 parcels of land and 16 buildings, for RM949.9mil.

In a statement to Bursa Malaysia, the company said that the proposed acquisition would be satisfied by cash totalling RM250mil, while the balance would be through the issuance of a 3% coupon redeemable convertible unsecured loan stock, with a staggered conversion price range of RM1.30 to RM2.50 over a 10-year period.

Tan: ‘The intention of this amalgamation exercise is to consolidate all property development and investment activities into Dijaya, while avoiding businesses that are conflicting or competing with its interest.’

“The intention of this amalgamation exercise is to consolidate all property development and investment activities into Dijaya, while avoiding businesses that are conflicting or competing with its interest,” said group CEO Tan Sri Danny Tan.

With the signing of the definitive agreements, the size of Dijaya's land bank would increase to 870 acres and the group's total gross development value would increase to RM37bil.

In addition, the investment properties' net lettable areas for Dijaya would increase to 1.4 million sq ft. The additional properties were expected to generate a more stable and recurring income for Dijaya.

It was noted that the parcels of land to be acquired were located within Kuala Lumpur, Johor Baru, Penang as well as in Kota Kinabalu and Sandakan.

Tan has agreed to procure the relevant parties, to be identified, to enter into long-term lease of three years with an automatic extension at an average annual lease rental investment yield of not less than 8% per annum or aggregate gross rental of RM42.7mil per annum, whichever is higher.

As an integral part of the proposed amalgamation exercise, Dijaya would undertake a combination of equity and debt fund raising exercise via a proposed rights issue exercise and proposed issuance of RM500mil guaranteed commercial paper/medium term notes programme.

The proposed renounceable rights issue is on the basis of four rights shares for every five Dijaya shares held and one bonus share for every four rights shares subscribed at an issue price of RM1.20 per rights share.

Tan and the parties related to him have provided Dijaya with undertakings to subscribe for RM250mil in value pursuant to the proposed rights issue, which would constitute the minimum subscription level for the proposed rights Issue.

By The Star