CHUANG'S Consortium intends to raise $322 million in a rights issue to pay for its recent acquisition of the basement and first floor of Bank of America Tower. The rights issue is on the basis of one rights share at $1.25 for every two shares held after the company's planned five-for-one consolidation. No less than 258 million new consolidated shares will be issued, with the company's associate Uniworld Holdings having agreed to take up 154 million of the rights shares and undertake a rights issue of its own to raise the funds. Uniworld will offer no less than 5.6 billion shares at 4.8 cents each on a two-for-five basis, raising about $270 million. Chuang's said it was raising the funds, despite having said it would fund the Bank of America purchase from internal resources, because ''given the existing market conditions and the cost of funding, directors now consider that it would be more prudent to finance such acquisitions by means of equity rather than borrowings''. Uniworld used an almost identical argument to justify its rights issue to pay for its entitlement in the Chuang's issue. The $1.25 per share rights issue price represents a discount of about 50 per cent on the Chuang's closing price on July 2, adjusted to put it on a consolidated basis. Uniworld's is slightly more generous, being a 57 per cent discount to the last closing price of 11.4 cents. The part of the Chuang's rights issue not taken up by Uniworld has been underwritten by Peregrine, as has the proportion of the Uniworld offer not taken up by Alan Chuang Shaw Swee. Mr Chuang has agreed to take up about half - 2.67 billion - of the Uniworld issue. Peregrine will earn a two per cent commission on the price of the rights shares it has underwritten. A special general meeting to consider the Chuang's share consolidation plan will be held today.
