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| IOI’s Lee: Dividend payouts not in jeopardy |
| Written by Loong Tse Min | |||
| Friday, 31 July 2009 11:04 | |||
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To a question on investor concerns that the rights issue would affect the short-term dividend payout, he said: “Not really”. Lee added that “if they are not happy”, the major shareholder would take it up. Progressive Holdings Sdn Bhd (PHSB), which is controlled by Lee, is expected to provide a written irrevocable undertaking to subscribe in full or procure the subscription in full of its direct and indirect entitlements to the rights shares and may underwrite the subscription by the others. Lee was speaking to reporters after the Alpha South East Asia magazine’s 3rd Annual Best Financial Institutions in South East Asia Awards where IOI Corp won the award for Best Corporate/Financial Institution of the Year (Malaysia). Analysts have interpreted IOI Corp’s rights issue as a possible signal of weaker cash flow generation, that would therefore lead to potentially lower dividend payout. The plantation group had on July 23 announced a renounceable one-for-15 rights issue at RM2.90 per share that would raise an estimated RM1.2 billion. The company’s strong cash balance of RM2 billion together with a low net gearing of 0.42 times had also raised questions on why the plantation player was raising funds. On the use of the RM1.2 billion proceeds, Lee said, “The funds will be kept for investment opportunities.” On whether any investment targets had been identified, he said: “Not yet. When we have, we’ll let you know.” At yesterday’s event, the other winners were Public Bank Bhd (Best Bank in Malaysia, for the third time in a row), Malayan Banking Bhd (Best Trade Finance Bank), CIMB group (Best Private Wealth Management Bank, Best Broker, Best Cash Management Bank, Best Investment Bank, Best Bond House and Best Islamic Finance House) and RHB Investment Bank (Best Equity House). This article appeared in The Edge Financial Daily, July 31, 2009.
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