KUALA LUMPUR (April 19): Iskandar Waterfront City Bhd (IWCity) today announced a share placement which will see businessman Ong Yoong Nyock emerging as a substantial shareholder in the group.

The placement of 83.74 million new shares, or 10% of IWCity's share base, to Ong and four other parties will raise RM40.2 million, the group said in a bourse filing. The shares are priced at 48 sen apiece.

Ong is the managing director and major shareholder of Tiong Nam Logistics Holdings Bhd and major sharehoolder of Wong Engineering Corp Bhd.  He is also the executive chairman and major shareholder of Hong Kong-listed Linocraft Holdings Ltd.

Ong has has agreed to subscribe for 53.57 million shares at RM25.71 million. The other four subscribers are Datuk Kong Tiam Ming (13.5 million shares), Datuk Koon Poh Tat (11.91  million shares), Yick Hoe Ferrous Steel Sdn Bhd (2.38 million shares) and Orando Equity Sdn Bhd (2.38 million shares).  

IWCity said RM38 million of the share placement proceeds will be used to pay contractors, subcontractors, suppliers and creditors. Another RM1.7 million will be used to pay for working capital and the rest to defray any expenses associated with the placement.

Noting that the exercise will enable Ong to come on board the Tan Sri Lim Kang Hoo-controlled group as a substantial shareholder, IWCity said: “Given his past experience and track record, the direct equity participation of Ong as a substantial shareholder in the company will serve as a confidence boost and commitment for the fundamental value of the group."

"The proposed placement will allow the group to leverage on the well corporate network and experience of Ong to further improve the group’ financial performance moving forward, which in turn is expected to create value to the shareholders of the Company,” it added.

Following the placement, IWCity’s share capital would increase to 921.13 million shares, from 837.39 million shares currently. Ong’s stake in the group would increase to 54.53 million shares or a 5.92% stake, from 957,600 shares or 0.11% stake.

Meanwhile, Lim’s stake in IWCity will be diluted to 34.29%, from 37.72%.

Earlier this month, Ekovest Bhd – also controlled by Lim – announced the purchase of a total of 38.96 hectares of freehold land in Pulai, Johor from Iskandar Waterfront Holdings Sdn Bhd for RM944.62 million.

Shares in IWCity closed 2.15% or one sen higher at 47.5 sen today, valuing the group at RM397.76 million. The counter saw 5.26 million shares traded.