TA ENTERPRISE BHD (TAE) is in the final leg of listing its property arm, TA Global Bhd, on the Main Market of Bursa Malaysia. The listing is expected on Nov 30. ECM Libra Investment Research, which does not rate TAE, looks at the salient features of the flotation exercise.

Under the listing exercise, TAE will be injecting virtually all its property assets into TA Global for RM1.8 billion in return for almost 2.3 billion equity shares, and 1.2 billion in irredeemable convertible preference shares (ICPS) in the latter. The par value of the shares is 50 sen.

TAE will also be injecting RM135 million cash into TA Global via a rights issue of 270 million TA Global shares at 50 sen each. TA Global will also capitalise RM520 million advances owing to TAE by issuing slightly more than one billion shares.

To fulfil TA Global’s bumiputera shareholding spread requirement, TAE will undertake an offer for sale of 460 million shares at indicative price of 50 sen each to the Malaysian bumiputera public, bumiputera placement as well as eligible directors and employees of TA Group and or business associates.

Besides the limited offer for sale, there will be no share offering or sale to the Malaysian public. The listing of TA Global will be undertaken by way of introduction instead. To fulfil TA Global’s public shareholding spread, TAE has declared dividend-in-specie to its shareholders of three TA Global shares and three ICPS for every five TAE shares held.

“The disposal of assets to TA Global will unlock RM900 million value at TAE’s company level. However, for accounting purposes, this will not be reflected at group level. On a pro-forma basis, value enhancement to its book value per share is 53 sen while pro-forma book value per share is RM1.98,” ECM Libra said in a report yesterday.

The research outfit said the listing of TA Global will propel it as a major listed property player.

“With the indicative listing price at 50 sen per share, it will have a market capitalisation of RM1.8 billion which put it as the sixth largest listed property company by market capitalisation,” ECM Libra says.

Investors who wish to participate in TA Global prior to its expected listing on Nov 23 will have to acquire TA Enterprise shares before the ex-date for its dividend-in-specie, on Oct 28.

Based on TA Global’s indicative issue price of 50 sen per share, ex-date price adjustment for TA Enterprise share will be 60 sen.