KUALA LUMPUR (Oct 29): Kuala Lumpur Kepong Bhd (KLK) said it will subscribe for 9.07 million new shares of Synthomer plc under the UK-listed speciality chemicals company's proposed placement exercise.

KLK and its wholly-owned subsidiary KL-Kepong International Ltd currently hold a total of 90.7 million shares in Synthomer, or 21.3% of its issued share capital.

In a statement on Friday, KLK said the subscription cost for the new shares will be £43.98 million (RM251.13 million), which will be financed by the group's existing cash reserves and bank borrowings.

"Upon completion of the placing on Nov 1, KLK group's shareholding in Synthomer's enlarged share capital will remain at 21.3%," it added.

Synthomer's proposed placement exercise comes on the back of its proposed acquisition of Eastman Chemical Co's adhesive resins business for a cash consideration of US$1 billion (RM4.15 billion).

"Synthomer intends to finance the acquisition from its surplus cash, a term loan of US$300 million (RM1.25 billion), and proceeds from an equity placing of up to 10% of Synthomer's issued share capital," KLK said.

"Accordingly, Synthomer had announced the proposed placing of new shares in Synthomer, representing up to 10% of Synthomer's existing issued ordinary share capital to institutional investors.

"The placing is expected to raise gross proceeds of approximately £200 million (RM1.14 billion)," the group added.

At 3.48pm, shares of KLK slipped 20 sen or 0.92% to RM21.58, valuing the group at RM23.33 billion.