Yong Tai to raise up to RM92m via private placement

KUALA LUMPUR (Dec 7): Yong Tai Bhd, which saw its shares actively traded today, after announcing a deal on the distribution of Covid-19 vaccine, separately announced a private placement to raise up to RM92.02 million.

The property developer said the money raised would be used to fund the development of its Impression City and Impression U-Thant projects, as well as for working capital.

In a filing with Bursa Malaysia, the group said the private placement will consist of up to 20% of its total number of shares to independent third party investors to be identified later.

As at Dec 4, Yong Tai’s issued share capital stood at RM536.57 million, comprising 1.04 billion shares, while the group also has 108.38 million outstanding irredeemable convertible preference shares (ICPS). Each ICPS can be converted into one new share.

Assuming the full conversion of the ICPS, Yong Tai will be able to issue up to 230.05 million shares under the private placement, raising its issued share capital to up to RM1.38 billion shares, valued at RM715 million.

“The issue price for each tranche of the placement shares will be determined separately. The basis of determining the issue price of the placement shares will be in accordance with market-based principles,” Yong Tai said.

For the first tranche of the proposed private placement of 25 million placement shares, the board has decided to fix the issue price at 40 sen per share, representing a premium of approximately 35.69% to the five-day volume-weighted average market price (VWAP) of its shares.

“The board is of the opinion that the proposed private placement is the most appropriate avenue of fund raising at this juncture, as it would enable the group to raise additional funds expeditiously without having to incur interest costs or service principal repayments as compared to bank borrowings,” Yong Tai said.

In turn, this allows the group to preserve its cash flow, Yong Tai said.

Both the RM60 million and RM15 million allocated for the Impression City and Impression U-Thant projects are for the payment of outstanding progress claims to their respective main contractor and suppliers.

At present, the Impression City project is 35% completed, while the Impression U-Thant project is about 25% completed.

Yong Tai was the most actively-traded counter on Bursa Malaysia today with 860.89 million shares exchanging hands, following the group’s announcement of its Covid-19 vaccine development and distribution deal with China-based Shenzhen Kangtai Biological Products Co Ltd.

The counter closed two sen or 5.48% higher at a two-year high of 38.5 sen, valuing the group at RM401.08 million.

Over the past five weeks, the stock has risen by 171.4%. Prior to this, it was hovering below the 20 sen-level for over a year.

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