NCT plans another private placement to fund property development projects

• Based on the illustrative gross proceeds, the company in a filing with Bursa on Thursday (Aug 10) said almost all of it or RM53.9 million, will be allocated for investment opportunities to expand the group’s property development activities. 
• It said some RM50 million and RM3.9 million would be earmarked for its mixed development project Grand Ion Majestic in Pahang and Ion Vivace in Batu Kawan, Penang, respectively.

KUALA LUMPUR (Aug 10): NCT Alliance Bhd (formerly Grand-Flo Bhd) is undertaking another private placement exercise of about 10% of its share base to raise some RM54.42 million, based on an illustrative price of 37 sen, mainly to fund its property development of the Grand Ion Majestic and Ion Vivace projects. 

Based on the illustrative gross proceeds, the company in a filing with Bursa on Thursday (Aug 10) said almost all of it or RM53.9 million, will be allocated for investment opportunities to expand the group’s property development activities. 

It said some RM50 million and RM3.9 million would be earmarked for its mixed development project Grand Ion Majestic in Pahang and Ion Vivace in Batu Kawan, Penang, respectively.

Meanwhile, RM141,000 will be used for NCT’s working capital and RM380,000 for estimated expenses for the proposed private placement, which is slated to be completed by the first quarter of 2024. 

In a filing with Bursa Malaysia, NCT said the exercise entails the issuance of up to 147.09 million new shares, representing approximately 10% of the group’s enlarged total number of issued shares, to independent investors to be identified at a later stage. 

The illustrative placement price of 37 sen represents a discount of 4.3 sen or 1.15% to the five-day volume weighted average market price of NCT shares, up to and including 37.43 sen on Aug 1. 

In the past year, NCT had undertaken a private placement of 181 million new shares, which was completed on March 29, 2023, raising total proceeds of about RM58.3 million to fund the development of its mixed development project in Genting Highlands, Bentong, Pahang.

As at March 31, NCT estimates that it will require approximately RM477.6 million for its property development activities up to till 2026. 

NCT’s net profit and revenue hit a record high for the financial year ended Dec 31, 2022 (FY2022). Its net profit was RM43.2 million while revenue was RM241.41 million for FY2022. 

For the first quarter ended March 31, 2023, NCT’s net profit declined to RM7.02 million from RM8.02 million primarily due to the expense of RM3.5 million incurred from the group’s employee share scheme (ESS). Excluding the ESS, core profit for the quarter came in at RM10.5 million.

Meanwhile, quarterly revenue rose to RM55 million from RM51.46 million driven by its property development segment. 

Moving forward, NCT said it would continue to focus on monetizing its inventories and progressing its development projects for timely completion. 

“In light of the recent hike in interest rate by the central bank which poses as the main threat to the purchasing power of properties, new project development launches will be phased accordingly based on the prevailing market conditions,” said the group. 

On Thursday, shares of NCT Alliance were unchanged at 34.5 sen, valuing the property developer at RM510.42 million.

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