Paramount Corp: It has become the first non government linked company to issue perpetual bonds. The perpetual bonds of rm200 million that the company is issuing form part of a rm550 million private debt securities programme. The remaining rm350 million comprises Islamic debt paper.
The rm200 million per perpetual bonds would allow PCB to issue them to institutional investors, to provide PCB with working capital while the rm350 million SUKUK is for its wholly owned subsidiary to finance the building of its new building campus. The funds would also be used for future capex to buy land for PCB’s development projects and invest in PCB’s education business.
Perpetual bonds are treated as equity. There is no dilution effect on its existing shareholders. The rates it is paying will be range from 6.25% to 6.5% per annum, which are below its current cost of equity. There is no negative carry as it has two years to utilize the funds.
A perpetual bond has no maturity date and the issuer may choose to defer paying distribution or coupon. It bears the characteristics of equity and no debt.
Perpetual bonds have previously been issued by GLCs such as MAS and Maybank.
The company sits on a cash balance of rm139 million with a gross gearing of 0.3. The group has a total GDV of rm8 billion over a landbank of 800 acres.
Gabungan AQRS: It has no immediate plan to do share placement to address the low liquidity of it stock. Currently (Feb 2013) the company has only 9.22% of its issued share capital traded.
Its single largest shareholder Ng Chun Seong holds a 20.27% stake followed by Sharum Niza who holds a 14.7% stake. The CEO is among the substantial shareholders owning an 11.04% stake.
Its IPO price is rm1.18.
It was looking at M&A partners to beef up its mechanical and engineering expertise in order to enhance its income stream.
The company primary focus would remain in construction. It has a slew of ongoing projects that have been lined up to be delivered up to 2016 including Package CI of LDP extensions, the Ampang LRT carpark and building as well as Package VI of the MRT project.
Its current property projects have a GDV of rm1.4 billion and a construction order book of rm1.2 billion. It is in a net cash position of rm27 million.
IJM Corp: IJM Corp has announced that it has entered into a MOU with a strategic investor, Guanxi Beibu Gulf Intl Prot Group Co Ltd to dispose of 40% stake in Kuantan Port. The preliminary valuation for the disposal is rm310 million. The proposed disposal will not have any binding effect until both parties enter into a definitive agreement which will be executed within six months of the date of the MOU. The proposed disposal also requires the approval of the government.
This is actually part of IJM Corp’s rm3 billion expansion plan of its port business.
The proceeds of the disposal will be utilized to finance part of the rm3 billion capex plan to expand the port business and for working capital. It will not be utilized to pay special dividends to shareholders.
Guangxi;s plan to expand the Kuantan Port will unlock earnings for IJM Corp’s port business in the foreseeable future.
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