In a statement today, ULHB said the proceeds would be used for repayment of borrowings, payment for the acquisition of land in Cyberjaya and for property development and working capital purposes.
Its managing director and chief executive officer, Wan Abdullah Wan Ibrahim, said the rights issue would allow the company to raise funds to repay borrowings and reduce interest cost which would lead to a more robust capital structure.
"Further, the inflow of capital for our property development activities will accelerate the realisation of value from our Nusajaya land bank and spur ULHB’s future earnings growth," he said.
Wan Abdullah said ULBH has a number of property projects in the pipeline which were due to be launched soon and was confident confident they would be well-received by the market.
"We are also optimistic that for 2010, the overall property market in Malaysia will outperform 2009 -- particularly for Johor where we expect a lot of excitement arising from the successful implementation of Iskandar Malaysia’s initiatives and the spillover demand from Singapore with the recovery of Singapore’s property market and the opening of the Marina Bay Sands and Resorts World Sentosa," he said.
ULHB said UEM Group Bhd (UEMG), its major shareholder, has provided irrevocable written undertaking to subscribe for its entitlement in full under the proposed rights issue.
"As at December 31, 2009, UEMG holds directly 1.873 billion ULHB shares, representing 77.14 per cent equity interest in ULHB.
"The remaining portion is expected to be underwritten," it said.
It said subject to all approvals being obtained, the proposed rights issue was expected to be completed by April 30, 2010.
By Bernama
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