BY CECILIA KOK

KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) plans to raise up to RM2bil via a renounceable two-call rights issue of new shares to meet its capital requirement.

In a filing with Bursa Malaysia on Thursday, the financial services provider said the entitlement basis and issue price of the rights shares would be determined and announced later.

Under the proposed exercise, the issue price of the rights issue would be payable in two calls – the first call of which would be payable in cash on application by the entitled shareholders and/or their renouncees who wish to subscribe for the rights shares, while the second call shall be capitalised from the company’s share premium and/or retained earnings account.

“It is the intention of the board that the first call shall be priced at a discount of at least 25% to the theoretical ex-rights price based on the five-market day volume weighted average price of MBSB shares immediately preceding the price-fixing date,” it said.

MBSB said the proposed rights issue was in line with the company’s strategy to strengthen its core capital.

“The proposed rights issue will also enable MBSB to increase its leverage ratio to at least 12.5% in compliance with Bank Negara’s requirement,” the company said.

“Pursuant to the proposed rights issue, MBSB will be able to capitalise on its stronger capital base to grow and expand its business,” it explained.