GSB proposes fund raising exercise to fuel RM714m acquisition

PETALING JAYA: GSB Group Bhd has proposed to undertake a fund raising exercise of up to 125 million consolidated shares as well as to consolidate every five of its shares into one share, to facilitate the acquisition of four property development companies for RM714 million.

The group announced that it has entered into share sales agreements for the acquisition of Aeon Frontier Sdn Bhd, Kerjaya Prospek Property Sdn Bhd and Kerjaya Hotel Sdn Bhd.

Simultaneously, it has also inked a share subscription agreement with Desanda Property Sdn Bhd for a 99.4% stake in the company.

Aeon Frontier, Kerjaya Prospek Property and Desanda Property are owned by Datuk Tee Eng Ho and GSB executive director Tee Eng Seng, while Kerjaya Hotel is owned by GSB executive chairman Datin Toh Siew Chuon along with Eng Ho and Eng Seng.

Collectively, the vendors are major shareholders of GSB with a 40.8% indirect equity interest via Javawana Sdn Bhd.

According to the group, the acquisition of Aeon Frontier, Kerjaya Prospek Property and Kerjaya Hotel for RM672 million will be satisfied via RM100 million in cash, RM33.47 million via the issuance of 196.9 million new GSB shares at 17 sen each, and RM538.57 million via the issuance of 3.16 billion redeemable convertible preference shares at 17 sen each.

The Desanda Property share subscription will be settled via the issuance and reinvestment of 251 million new GSB shares by Eng Ho and Eng Seng at an issue price of 17 sen.

Toh said the acquisition will significantly scale up its property development business once completed. She added that it will also increase the size of GSB’s landbank as well as geographical reach to Malacca and other parts of Selangor such as Gombak.

“The acquisitions will give GSB immediate access to on-going property development projects with total remaining gross development value of RM1.74 billion in strategic locations in Kuala Lumpur and Penang such as Bloomsvale at Jalan Puchong/Jalan Klang Lama, Straits Residence in Seri Tanjung Pinang, Penang as well as Kaleidoscope in Setiawangsa, Kuala Lumpur. This in turn will enhance the group’s future earnings,” said Toh in a statement.

source https://www.thesundaily.my/business/gsb-proposes-fund-raising-exercise-to-fuel-rm714m-acquisition-CE1240444