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Wednesday, January 28, 2009

TA Ent mulls best way to structure property unit's IPO

Stockbroking firm TA Enterprise Bhd (TAE) may delay plans to list its property unit on the local bourse for the second time, due to a weak stock market, industry sources said.

TAE, which has the Securities Commission's nod to list TA Global Bhd (TAGB) on Bursa Malaysia's main board by March, may list it in the second quarter in view of current market sentiment, a source told Business Times.

Its earlier target was to list TAGB by December 2008, later postponing it to March this year.

When contacted, TAE group managing director and chief executive officer Datin Alicia Tiah told Business Times that the group is still aiming to list TAGB by March or April, but the plan will be guided by market sentiment.
"While we are optimistic to list the property business, we want to be sure the timing is right especially when the world economy is in a depressed situation. TAE is expanding its property business and the listing will give it more recognition overseas as it expands," Tiah said.

She said TAE is talking to underwriters for the placement of the shares, and exploring the best way to structure the initial public offering (IPO) so that the market will be able to absorb the listing.

"Our approval has an expiry of six months. In the event we do have to delay the IPO, we can always apply for an extension," Tiah said.

TAGB'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.

TAE is proposing to sell its property units to TAGB in an all-share deal and raise about RM613 million.

It will inject its property assets held under TA Properties Sdn Bhd; Sanjung Padu Sdn Bhd; Wales House Trust, which owns the Radisson Plaza Hotel in Sydney; and Taman Duta Residences, in exchange for shares worth RM1.75 billion in TAGB.

TAE is also proposing a capital distribution to its shareholders that will cut its share capital, share premium reserve and retained earnings. As a result, its par value would be reduced to 50 sen from RM1 currently.

Upon completion of the proposed capital distribution and listing, TAE will hold at least 24.3 per cent equity interest in TAGB.

TAE will also use part of the proceeds to apply for an investment banking licence, and the rest for its future working capital.

By Business Times (by Sharen Kaur)

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