S P SETIA obtained approvals to proceed with the proposed I&P Group and Bangi Land Acquisitions

SETIA ALAM: S P Setia Berhad today announced that the Group will be moving forward with the two acquisitions announced earlier this year – the I&P Group from Permodalan Nasional Berhad (PNB) as well as the 342.5 acres of land area in Bangi known as the Bangi Land escalating the Group to the third largest developer ranking in terms of land bank size in the country. The Group had obtained the approvals from its shareholders in the Extraordinary General Meeting held today and marked the final conditions precedent to be fulfilled for legal completion of the share acquisition.

“We believe the synergistic opportunities offered by I&P Group will be tremendous. The I&P Group has land banks located in the growth areas of Klang Valley and Johor Bahru which are also Setia’s stronghold areas. This is definitely an excellent platform to spur Setia’s future growth,” said Dato’ Khor Chap Jen, President & CEO of S P Setia.

On 22nd June 2017, the Group entered into a Conditional Share Purchase Agreement to acquire I&P Group Sdn Berhad (“I&P Group”) for RM3.65 billion (“Proposed I&P Acquisition”), and in conjunction with the Proposed I&P Acquisition, the Group had proposed a fundraising exercise to raise up to RM3.60 billion which has been approved by the shareholders of the Company in the Extraordinary General Meeting today.

The Proposed I&P Acquisition is expected to be completed in the fourth quarter of FY2017, and upon completion, I&P Group will become a wholly-owned subsidiary of the Company where the land banks of the enlarged Group will increase by an additional 4,276 acres.

“Currently Setia has two established townships in Semenyih; Setia Ecohill and Setia Ecohill 2. The new acquisitions of the Bangi Land and I&P Group’s developments namely Brogaville, Alam Sari and Glengowrie will make Setia a dominant player in the southern corridor of Greater Kuala Lumpur,” Dato’ Khor added.

The proposed 342.5-acre Bangi Land development is expected to generate an estimated GDV of RM2.74 billion. This land is within a 5km radius from our current townships. There are schools, universities such as Universiti Kebangsaan Malaysia, banks and shophouses in the vicinity of the Bangi Land and all this will supplement the current offerings we have.

Development for the Bangi Land will include residential and commercial properties consisting of approximately 4,100 units of two-storey terrace houses, cluster homes, affordable homes and shop offices supported by public and infrastructure facilities such as schools, water tank reserve, power distribution stations, community centre and medical facility, amongst others.

Also approved in the EGM today were the fundraising proposals of a renounceable rights issue of new ordinary shares in S P Setia to raise gross proceeds of up to RM1.2 billion, renounceable rights issue of a new Class B Islamic redeemable convertible preference shares (“RCPS-i B”) to raise gross proceeds of up to RM1.2 billion and a private placement of new shares to raise up to RM1.2 billion.

For the renounceable rights issue of new ordinary shares, the entitlement basis was fixed at 2 new ordinary shares for every 15 existing ordinary shares in S P Setia, at an issue price of RM2.65, or approximately 20.2% discount to the theoretical ex-rights price (“TERP”) of S P Setia Shares based on the five (5)-day volume weighted average market price (“VWAMP”) of S P Setia Shares up to and including 15 November 2017, being the last market day prior to the price-fixing day. As for the RCPS-i B, the entitlement basis was fixed at 2 RCPS-i B for every 5 existing ordinary shares in S P Setia, at an issue price of RM0.88 per RCPS-i B. Chronologically, the private placement will take place after the completion of the rights issue exercise.

S P Setia’s prospects for the rest of the year remain positive with total unbilled sales of RM7.05 billion, anchored by 31 ongoing projects and effective remaining land banks of 5,384 acres with a GDV of RM79.82 billion as of 30th September which excludes I&P Group’s land banks.