Date : 06 December 2013

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS): NON RELATED PARTY TRANSACTIONS MULPHA INTERNATIONAL BHD (“MIB”) - Subscription of New Fully Paid Ordinary Stapled Securities of Aveo Group Limited (formerly known as FKP Property Group) (“Aveo”) under an Accelerated Non-Renounceable Pro-Rata Entitlement Offer undertaken by Aveo

MULPHA INTERNATIONAL BERHAD

TypeAnnouncement
SubjectTRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS)
NON RELATED PARTY TRANSACTIONS
DescriptionMULPHA INTERNATIONAL BHD (“MIB”)
- Subscription of New Fully Paid Ordinary Stapled Securities of Aveo Group Limited (formerly known as FKP Property Group) (“Aveo”) under an Accelerated Non-Renounceable Pro-Rata Entitlement Offer undertaken by Aveo

1.                  INTRODUCTION

The Board of Directors of MIB wishes to announce that MIB’s subsidiaries had on 5 December 2013, subscribed to their full entitlement under an underwritten 5 for 9 accelerated non-renounceable pro-rata entitlement offer (“Entitlement Offer”) of new fully paid ordinary stapled securities (“New Stapled Securities”), undertaken by Aveo Group Limited (formerly known as FKP Property Group) (“Aveo”), a 26.22% owned associate company of MIB, which is listed on the Australian Stock Exchange (“ASX”).

The full entitlement of MIB’s subsidiaries under the Entitlement Offer, amounts to 46,848,134 New Stapled Securities at an offer price of A$1.30 each (“Offer Price”) for a total cash consideration of A$60,902,574.20 (equivalent to RM178.44 million based on today’s exchange rate of A$1.00 to RM2.93) (“Proposed Subscription”).

2.         INFORMATION ON AVEO

Aveo is a 26.22% associate company of MIB and is listed on the ASX. Aveo is a leading and trusted owner, operator and manager of retirement communities across Australia. Aveo’s philosophy is underpinned by a commitment to grow with older Australians by inspiring greater living choices. Aveo currently does so for 12,000 residents in 76 retirement villages across Australia. Aveo also manages and develops a diversified A$800 million property portfolio. Over 30 years, Aveo’s portfolio has grown to one that encompasses retirement, residential, commercial, industrial and mixed-use property assets. Together these communities define how hundreds of thousands of people in Australia live, work, retire and invest.

3.         SALIENT TERMS OF THE ENTITLEMENT OFFER

The salient terms of the Entitlement Offer are as follows:-

(a)          The Entitlement Offer is an underwritten accelerated, non-renounceable pro-rata entitlement offer under which eligible stapled securityholders in Aveo will be entitled to acquire 5 New Stapled Securities for every 9 existing stapled securities held on 31 October 2013 at the Offer Price.

(b)          The Offer Price represents a 36% discount to the last traded closing price of Aveo’s existing stapled securities on ASX on 25 October 2013 of A$2.03, a 26.5% discount to the theoretical ex-rights price of A$1.77 and a 52.5% discount to Aveo’s proforma net tangible assets per stapled security as at 30 June 2013 of A$2.74.

(c)          The Entitlement Offer is expected to raise approximately A$232 million with the institutional component comprising approximately A$177 million and the retail component comprising approximately A$55 million.

(d)         The net proceeds from the Entitlement Offer will be used to de-lever and extinguish substantially short-term debt maturities, thereby improving Aveo’s capital position.

4.         LIABILITIES TO BE ASSUMED

There are no liabilities, including contingent liabilities and guarantees to be assumed by MIB Group arising from the Proposed Subscription.

5.         SOURCE OF FUNDING

The Proposed Subscription was financed through internally generated funds and/or debt financing facilities.

6.         RATIONALE, PROSPECTS AND RISK FACTORS

The Proposed Subscription enables MIB’s subsidiaries to maintain its 26.22% interest in its associate company, Aveo and will ensure that MIB’s subsidiaries continue to be the single largest shareholder of Aveo after the completion of the Entitlement Offer.

The net proceeds raised from the Entitlement Offer will be used to de-lever and extinguish substantially all short-term debt maturities, thereby improving Aveo’s capital position. The raising will enable Aveo to accelerate its implementation of the stated strategy of being a pure retirement developer, manager and owner. Aveo’s gearing as at 30 June 2013 is expected to substantially decrease from 31.5% to 19.3% on a proforma basis, following completion of the Entitlement Offer. Aveo stated: “Following a detailed review of the business, capital structure and obligations of Aveo, it was determined that an equity raise provided the best path forward to enable Aveo to de-lever and meet its short-term debt maturities, while better positioning the company to deliver on its pure play retirement operator strategy.”

The Board of Directors is not aware of any risk factors arising from the Proposed Subscription, other than the normal and global economic risks, and general risks associated with the ordinary course of business of Aveo. In any case, MIB’s subsidiaries are already exposed to such risks via their existing 26.22% interest in Aveo.

7.         EFFECTS OF THE PROPOSED SUBSCRIPTION

7.1       Share Capital and Substantial Shareholders’ Shareholdings

The Proposed Subscription will not have any effect on the issued and paid-up share capital and substantial shareholders’ shareholdings of MIB.

            7.2       Net Assets and Gearing

The Proposed Subscription is not expected to have any material effect on the net assets of MIB Group for the financial year ending 31 December 2013. However, the Proposed Subscription is expected to increase the gearing level of MIB Group for the financial year ending 31 December 2013.

7.3       Earnings and Earnings Per Share

The Proposed Subscription is not expected to have any material effect on the earnings and earnings per share of MIB Group for the financial year ending 31 December 2013. 

8.         APPROVALS REQUIRED

The Proposed Subscription is not subject to the approvals of the shareholders of MIB or any authorities.

9.         COMPLETION OF THE PROPOSED SUBSCRIPTION

The Proposed Subscription is expected to be completed on 9 December 2013.

10.       INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

Insofar as the Board of Directors is aware, none of the directors and/or major shareholders of MIB and/or persons connected with them have any interest, direct or indirect, in the Proposed Subscription.

11.       STATEMENT BY BOARD OF DIRECTORS

The Board of Directors of MIB, having considered all aspects of the Proposed Subscription, is of the opinion that the Proposed Subscription is in the best interest of MIB Group.

12.              HIGHEST PERCENTAGE RATIO

The highest percentage ratio applicable to the Proposed Subscription pursuant to Chapter 10, Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is 7.17%.

13.       DOCUMENTS FOR INSPECTION

           

All documents relevant to the Proposed Subscription are available for inspection at the registered office of MIB at PH2, Menara Mudajaya, No. 12A, Jalan PJU 7/3, Mutiara Damansara, 47810 Petaling Jaya, Selangor Darul Ehsan during normal business hours from Mondays to Fridays (except for public holidays) for a period of 3 months from the date of this announcement.

This announcement is dated 6 December 2013.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Announcement Info

Company NameMULPHA INTERNATIONAL BERHAD  
Stock Name MULPHA    
Date Announced6 Dec 2013  
CategoryGeneral Announcement
Reference NoMI-131206-C1864

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