KUALA LUMPUR: Lim Seong Hai Capital Bhd (LSH Capital) has announced a series of corporate proposals, marking its upstream integration expansion into property development, and to further strengthen its fast-growing construction business.

       Upon completion of the proposals, the LSH Capital Group will have an enlarged secured construction orderbook amounting to RM1.1bil in aggregate with an overall outstanding orderbook of RM782mil.

       It will also carry a property development project with a gross development value (GDV) of RM1.59bil which is expected to provide earnings visibility until 2026.

       Additionally, the LSH Capital Group is also involved in construction and property development projects amounting to RM2.7bil via the BEST Framework collaboration.

       The proposals entail a combined acquisition value of RM157.6mil via the execution of share sale agreement to acquire 100% in Astana Setia Sdn Bhd for RM95mil, assets exchange agreement and debt settlement cum share subscription agreement with LSH Ventures Sdn Bhd for a total value of RM62mil to be fully satisfied via the issuance of new LSH Capital shares at 45 sen, which presents a premium of 7.14% to 9.20% over the closing market price on March 25, 2022, and the volume-weighted average price of six months.

       LSH Capital said Astana Setia had an existing RM395.9mil GDV for its Residensi Laman Segar Hijau (LSH Segar) development project in Taman Segar, Cheras.

       Astana Setia also has an external construction order book of RM390.81mil, of which RM146.82mil is still outstanding.

       The proposed transaction with LSH Ventures involves the acquisition of four parcels of lands and buildings on-site in attractive locations across Kuala Lumpur, Kajang and Johor Bahru for a consideration of RM8.14mil.

       In addition, LSH Capital will settle approximately RM54mil amount owing to directors of LSH Venture.

       Upon completion, LSH Capital will own 99% in LSH Ventures and will have 93.75% effective interest in Astana Setia & Euro Saga Sdn Bhd (Astana Setia Eugo Saga), an entity that will launch the upcoming flagship project “Lake Side Homes” on an 11.85-acre land in Sungai Besi with an estimated GDV of RM1.19bil.

       LSH Capital will also seek shareholder approval to expand its core businesses to include property and construction-related business as these new integrated upstream businesses are expected to contribute more than 25% of the group’s net profit, moving forward.

       “Since its LEAP Market listing in July 2021, LSH Capital has ramped up its growth efforts, while rewarding shareholders with strong earnings performance in the latest financial year ended Sept 30, 2021, and dividends of RM2.34mil, to meet the 30% benchmark set by the group,” said non-executive chairman Tan Sri Lim Keng Cheng.

       “The latest exercise puts the group on the right track towards strengthening its presence in the local construction and property development sectors and to become a billion-ringgit company in the long run,” he said.

       Astramina Advisory Sdn Bhd is the approved adviser and continuing adviser for LSH Capital and is the appointed adviser for the proposed corporate exercises.