KUALA LUMPUR, March 16 (Reuters) - Iskandar Waterfront
Holdings Sdn Bhd (IWH) , which recently offered to
buy out its listed unit Iskandar Waterfront City Berhad (IWC)
, said the merged entity was looking to raise about
$338 million this year by issuing new shares.
IWH, controlled by Malaysian property tycoon Lim Kang Hoo,
will issue around 600 million new shares to raise funds as part
of the merger to cut debt, a senior official as well as the
company's financial adviser told Reuters.
While the price for the shares has not been finalised, IWH's
financial adviser Astramina Advisory estimates that at 2.47
ringgit per share - a 10 percent discount to IWC's closing price
on Wednesday - the merged entity would raise about 1.5 billion
ringgit ($338 million).
"This would substantially pare down the 2 billion ringgit
debt consolidated under IWH after the merger. A lot of parties
have expressed interest (for the placement), some of them are
foreign corporates," said Wong Muh Rong, managing director for
The shares will be issued and privately placed to
institutional investors, she said.
Last week, IWH announced plans to buy out the 61.7 percent
stake it does not already own in IWC. It will then assume IWC's
listed status on Bursa Malaysia. Shares of IWC have jumped as
much as 59 percent since the announcement.
The merger deal is expected to be completed in six to nine
months, after which IWH targets a secondary listing in Hong
Kong, China or Singapore within 12 months.
Lim, who is also IWH's executive vice chairman, said
secondary listing plans will materialise when the merged
company's market capitalisation hits 30 billion ringgit. The
company has not decided how much it will raise.
IWC's market capitalisation is currently 2.26 billion
ringgit, Thomson Reuters data shows.
Lim told Reuters he was considering a secondary listing in
Hong Kong or China "because that is the market from which we
brought in the investors (who) have deep pockets".
Separately, Lim said development works for the city centre
project Bandar Malaysia's Phase 1 was expected to begin by
April. In December 2015, IWH and China Railway Engineering Corp
bought a 60 percent stake in Bandar Malaysia from troubled
Malaysian state fund 1MDB for 7.41 billion ringgit.
($1 = 4.4340 ringgit)
(Reporting by Liz Lee; Editing by Himani Sarkar)