Sarawak property developer, Naim Holdings Bhd, has proposed to undertake a renounceable rights issue of up to 355,416,000 new ordinary shares at an issue price of 45 sen a piece on the basis of three rights shares for every two existing shares.

This targets to raise up to RM159.9mil, with the proceeds mainly to be utilised to fund residential property projects.

Approval from the Securities Commission is being sought by Abdul Hamed (also Naim chairman), Hasmi (managing director) and their PACs, who collectively own nearly 94.83 million shares or 40.02% of Naim's issued capital of 250 million (excluding 13 million treasury shares) for an exemption from the obligation to undertake a mandatory offer for the remaining Naim shares not already owned by them arising from the subscription for the excess rights shares.

The proposed rights issue would strengthen Naim's financial position and capital base by reducing its gearing level and increasing its net assets, thereby providing greater financial flexibility, according to Naim.

Naim said RM70mil or 70% would be channelled to fund property development activities and RM25mil for repayment of bank borrowings if the minimum RM100mil is raised and if the maximum RM159.9mil is raised, RM114.9mil and RM40mil will be utilised for property development and loan repayment respectively.