Hong Leong Asia plans $145m share placement

Most proceeds will support corporate activities.

Hong Leong Asia plans to raise about $145m through a placement of 50 million new ordinary shares at $2.90 apiece.

The company entered into a placement agreement with CGS International Securities Singapore as the sole placement agent on 28 April.

The placement price represents a 5.76% discount to the volume-weighted average price of $3.0771 on 27 April, the last full market day before the company called a trading halt.

The placement shares represent about 6.68% of Hong Leong Asia’s existing issued shares and 6.26% of its enlarged share capital. The proposed placement is not underwritten and will be offered to institutional and accredited investors.

Net proceeds are estimated at $142.3m after deducting about $2.7m in fees and expenses. Hong Leong Asia plans to use $113.8m, or 80% of the proceeds, for general corporate activities, including investments, acquisitions, business expansion, and repayment of bank borrowings.

The remaining $28.5m will be used for general working capital requirements.

On a pro forma basis, the placement would raise net tangible assets per share to 141.34 cents from 131.77 cents, whilst basic earnings per share would fall to 14.14 cents from 15.08 cents.

Completion is subject to conditions, including SGX-ST approval-in-principle for the listing and quotation of the placement shares. The company said completion must take place no later than 11 May unless extended by agreement.

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