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Thursday, February 24, 2011

Shareholders okay SP Setia’s share placement proposal

Tan Sri Liew Kee Sin (right) at the press conference after the meeting. — Bernama

SHAH ALAM: SP Setia Bhd shareholders approved a proposal for the placement of up to 15% of its issued and paid-up share capital. This would involve the issuance of up to 152.52 million new shares, said SP Setia president and chief executive officer Tan Sri Liew Kee Sin after the company's EGM and AGM.

The company hopes to raise between RM1bil and RM2bil from the proposed placement which will be done via a book building exercise.

The placees are SP Setia major shareholders Amanahraya Trustees Bhd (20.12%), a wholly-owned subsidiary of Permodalan Nasional Bhd, the Employees Provident Fund (14.47%) and Liew (11.96%).

The proceeds from the placement will be used for three major new projects that are being planned for this year.

Some RM762mil will be utilised for its projects in KL Eco City, Setia City in Setia Alam and Fulton Land in Melbourne. These three projects have a combined gross development value of RM12.5bil.

The group is also negotiating with the Government on a land swap deal to acquire 40.22 acres in Bangsar in exchange for a modern integrated health and research facility to be constructed on 55.33 acres in its Setia Alam township.

On the National Institute of Health (1NIH), Liew said the project would stimulate growth in the Setia Alam township as there would be a few thousand civil servants working in the facility.

“They will be working, eating and playing within the township. Setia Alam will become like any other modern urban living place in Malaysia.

“We are now in discussions with the Government to build 1NIH. We will probably commence work in six months' time. Once we deliver 1NIH, then we will start to develop the Bangsar land,” said Liew.

Some RM245mil to RM430mil from the placement proceeds will be earmarked for 1NIH, the Bangsar land and further landbanking acquisitions.

Liew said the Bangsar land was very prime Government land. It would be a mixed residential development with the theme of being Bangsar's cultural centre.

“Bangsar is where the upper middle-class people live. We plan to build a museum for artists, a library and a performing arts centre,” said Liew.

Out of the 11 blocks of buildings in KL Eco City, SP Setia plans to maintain one office tower block of 515,738 sq ft and retail space of 313,605 sq ft for its own use.

“We want to tell our buyers, we will be there, and we will anchor the tower for you. The rental in the Gardens, Mid Valley, which is just opposite our development, is RM8 psf. We are hoping to achieve that same kind of yield,” Liew said.

SP Setia is the largest developer in Malaysia in terms of sales. For its year ended Oct 31, 2010, it achieved a new sales record when its revenue increased 40% to RM2.31bil, while net profit was up 47.06% to RM251.81mil.

It is targeting a 30% increase in revenue to RM3bil for its current financial year.

The group's shareholders also approved a proposal for bonus issue on the ratio of one new share for two existing shares held after the proposed share placement.

They also approved SP Setia's proposal to increase the authorised share capital to RM2.25bil comprising 3 billion shares from RM1.2bil comprising 1.6 billion shares currently.

By The Star

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