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PETALING JAYA: Some industry observers have raised concern over the reference price of IGB Commercial Real Estate Investment Trust REIT or IGBCR, which they said was the reason that caused the shares to hit limit down on the day it made its debut on the stock exchange.
Industry observers who spoke to StarBiz claimed the reference price, which was set at RM1 per share, was “higher than it should have been.”
One dealer said the effective cost of one IGBCR share was 40 sen to shareholders of IGB Bhd and 71 sen to institutional funds.
“Realistically, Bursa Malaysia should use 71 sen as the reference price, not RM1,” the dealer said.
Meanwhile, another industry observer said that the IGBCR shares were sold at RM1 apiece to shareholders of IGB, but the effective cost became 40 sen due to the distribution in specie (DIS).
However, in a reply to StarBiz, Bursa Malaysia justified its decision to set the reference price at RM1 per share.
“Please be informed that the reference price of IGBCR was fixed at RM1 based on the issue price of restricted offer for sale (ROFS) with distribution-in-specie (DIS), which has the highest percentage of shares available for trading,” it said.
IGBCR, which made its debut on the Main Market of Bursa Malaysia yesterday, hit limit down after plunging 30 sen or 30% to 70 sen with nearly 16.2 million shares done.
The stock was the 13th worst decliner on the stock exchange yesterday.
Apart from the institutional offering, IGBCR units were also offered to shareholders of IGB through a ROFS, where IGB Bhd shareholders were entitled to subscribe to two ROFS units at RM1 each for every five shares held.IGB shareholders who subscribed to the ROFS were entitled to DIS, on the basis of three DIS units for every two ROFS units subscribed.
This meant that IGB shareholders would have paid RM2 for five units of IGBCR, representing 40 sen each, nearly a 44% discount over the institutional price of 71 sen.
The ROFS was undersubscribed by 21.3% or some 163.5 million units.
IGBCR comprises 10 highly valuable office buildings, which were injected into the trust at a combined value of RM3.16bil.
The properties are Menara IGB and IGB Annexe, Centrepoint South, Centrepoint North, Boulevard Properties, Gardens South Tower, Gardens North Tower, Southpoint Properties, Menara Tan & Tan, GTower and Hampshire Place Office.
Earlier, IGBCR said it will be the sixth largest Malaysian REIT and the largest stand-alone office REIT by market capitalisation, net lettable area and appraised value.