<O:p><TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published January 24, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>CapitaLand yet to make decision on fund-raising
Firm has received various such proposals, which include rights issues
By JAMIE LEE
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>CAPITALAND has been receiving various proposals for fund raising - including through rights issues - but it has yet to make a decision.
The property titan said this yesterday in response to media reports that it was considering a rights issue.
Dow Jones reported yesterday that South-east Asia's largest property developer was mulling a rights issue to raise about $1.5 billion.
Citing people familiar with the situation, the report said yesterday morning that CapitaLand was looking at offering one new rights share for every four existing shares at $2.20 each. This represents a 12 per cent discount to CapitaLand's opening price of $2.50 yesterday.
The stock was the most actively traded yesterday, with 59.1 million shares changing hands. It dived 14 cents, or 5.6 per cent, to end at $2.36.
The report added that the possible capital increase could occur around mid-February, though no firm decision had been made.
In a regulatory filing yesterday, CapitaLand said that 'it has received and is continuing to receive various proposals for fund raising'.
'These proposals include rights issues,' CapitaLand said. 'CapitaLand has not made any decisions.'
Talk of a rights issue had surfaced two weeks back after a similar report by Dow Jones, causing the stock to shed 8.2 per cent.
The company then said that it would not comment on market speculation.
CIMB-GK analyst Donald Chua told BT that should CapitaLand look to raise funds through a rights issue, the monies could be channelled later to buying assets on the cheap in markets such as Singapore, Vietnam and China.
'In Singapore and Vietnam, the prices are still a bit sticky so the (management) guidance is that not at the moment,' said Mr Chua, adding that while China seems like 'the best bet', a lot hinges on the price and the developments in the Chinese property market.
It could be a safety precaution to shore up the balance sheet now for a 'rainy day', he added.
Analysts have argued that property firms are in a stronger cash position compared with earlier crisis periods. The company has $4.2 billion in its coffers as at Sept 30, 2008.
But the sector is bracing for a double whammy pullback as demand is set to fall against an oversupply of units, with some analysts expecting about 20 per cent fall in prices over the next few years.
This potential right issue follows one by DBS last December. The bank said that it would raise about $4 billion to boost its balance sheet and for organic growth. The issue price was at a hefty 45 per cent discount to its closing price on the day before the announcement.
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