It has to get shareholders’ approval for its proposed US$80 million investment in two companies with timber extraction rights in Indonesia ’s Papua province. The 80000 ha are slated for oil palm cultivation.
The Papua oil palm is still some years as it takes about three to four years away for oil palm trees to start bearing fruit. Moreover, the group would first need to obtain the final go head from Indonesia ’s Forestry Ministry before extracting timber and clearing the land for planting.
In any case, the group’s borrowings will go up substantially following the US$80 million purchase. Currently it has almost zero borrowings. The company could borrow against its 379 acres in Pulau Indah, Klang carried a rm163 million in its book.
Assuming 80% of the purchase considering is funded by borrowings, the group‘s gearing will increase to 0.86 times (rm215 million). Net assets per share are expected to fall to 0.89 sen.
The purchase will be funded by internally generated funds, bank borrowings and/or a fundraising exercise.
Its cash and bank balances stood at about rm1.5 million as at June 31, 201. Besides the USS$80 million purchase price, Wijaya will need about rm20 million to rm30 million to get the project off the ground.
The new shares cannot be issued below their par value of rm1 apiece unless they are offered to all shareholders in a rights issue. A shareholder placement is unlikely to happen unless the stock appreciates further.
A shareholders’ meeting to vote on the deal will be called within two weeks from 14 Nov 2011.
The group is also benefiting from its interest in its 45% owned construction associate Wijaya Baru Sdn Bhd which is in the business of implementing flood mitigation projects.
Its CEO said that Wijaya in good stead to vie for more jobs from the rm1 billion slated for flood mitigation works in Perlis, Perak and Johor announced by the PM in Budget 2012.
The Papua oil palm is still some years as it takes about three to four years away for oil palm trees to start bearing fruit. Moreover, the group would first need to obtain the final go head from Indonesia ’s Forestry Ministry before extracting timber and clearing the land for planting.
In any case, the group’s borrowings will go up substantially following the US$80 million purchase. Currently it has almost zero borrowings. The company could borrow against its 379 acres in Pulau Indah, Klang carried a rm163 million in its book.
Assuming 80% of the purchase considering is funded by borrowings, the group‘s gearing will increase to 0.86 times (rm215 million). Net assets per share are expected to fall to 0.89 sen.
The purchase will be funded by internally generated funds, bank borrowings and/or a fundraising exercise.
Its cash and bank balances stood at about rm1.5 million as at June 31, 201. Besides the USS$80 million purchase price, Wijaya will need about rm20 million to rm30 million to get the project off the ground.
The new shares cannot be issued below their par value of rm1 apiece unless they are offered to all shareholders in a rights issue. A shareholder placement is unlikely to happen unless the stock appreciates further.
A shareholders’ meeting to vote on the deal will be called within two weeks from 14 Nov 2011.
The group is also benefiting from its interest in its 45% owned construction associate Wijaya Baru Sdn Bhd which is in the business of implementing flood mitigation projects.
Its CEO said that Wijaya in good stead to vie for more jobs from the rm1 billion slated for flood mitigation works in Perlis, Perak and Johor announced by the PM in Budget 2012.
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