Sin Chew Daily , 12 November 2011 - Dijaya Tie-up to Develop RM10 Billion Mixed Property Project; Ivory Proposes One Right Share and One Free Warrant

Sin Chew Daily , 12 November 2011

Ivory Properties Group Bhd (Ivory 5175, main property stock) and Dijaya Corp (DIJACOR, 5401 main property stock) tied up to acquire 102.56 acres of land from Penang Development Corporation for RM1.07billion to develop a mixed residential and commercial property project with a gross development value of RM10 billion.

IVORY ONE (1) BONUS SHARE FOR EVERY FOUR (4) RIGHTS SHARES SUBSCRIBED

Ivory Properties proposed a renounceable rights issue of ordinary shares together with a new free detachable warrant on the basis of one(1) Bonus share for every (4) four rights shares subscribed.

Ivory Properties and Dijaya Corp undertake a joint-venture to purchase a piece of land from the Chief Minister of Penang (Incorporation) and Penang Development Corp, with Ivory Properties holding 51% and Dijaya Corp holding the remaining 49%. The plan will tie both companies to share the responsibilities in running the project.

The development would comprise of residential, shopping mall, hotel, office suites, office towers, retail spaces and an open mall with a boulevard. It is expected to be completed in eight years and the construction of the first phase is scheduled to begin next year. Financial assistance will be through bank borrowings and internal funding.

Following the announcement of a tie-up, both Dijaya Corp and Ivory Properties have asked for a one-day suspension in trading of their shares today. The closing share price of Ivory Properties Group Bhd was RM1.00 while DIJAYA Corp was at RM1.39. Both will resume trading on Monday.

As for the plan to add more shares, Ivory Properties has proposed to finance the project via a renounceable rights issue of 186,000,000 new ordinary shares of 50 cents each, with a bonus issue of 65 cents under detachable warrants (as at 10 November 2011 closing amount of 96 cents, calculated at an average of 5-day share prices). This will be a discount of 23%.

Of the RM93 million raised with the increase of shares volume, RM50 million will used for the development of the property projects and the balance RM40 million will be used for operational expenditures.

As for the plan for the bonus issues, the company will base on the current market price and maintain the profitable investments to carry out the plan. In between, they will issue 46.5 mil bonus issues of Ivory shares.

As at end of last year, Ivory Properties share prices and investment counter accounted for RM207.66 million and RM2.484 million.

On completion of the whole property development project, the company’s paid investments would be from RM93 million and expanded to RM302.25 million.

Besides that, the company proposed to register and to expand the share volume from RM1 billion to RM5 billion.