KUALA LUMPUR: Capital A Bhd’s logistics arm, Teleport Everywhere Pte Ltd, has entered into an agreement to issue US$50mil (RM205mil) in redeemable convertible perpetual securities (RCPS) to funds managed by HPS Investment Partners.
In a filing with Bursa Malaysia, Capital A said Teleport, a 93.48%-owned subsidiary, signed a subscription agreement with HPS for the issuance, valuing Teleport at US$500mil (RM2.03bil).
The RCPS is a perpetual capital instrument with no fixed maturity, although HPS has the option to require redemption beginning five years from the closing date.
Teleport may also redeem the securities from two to five years after completion, subject to the terms of the agreement.
The RCPS may be converted into ordinary shares of Teleport upon the occurrence of certain events, such as an initial public offering or a trade sale.
Capital A said its shareholding in Teleport would not be materially diluted following any conversion, and Teleport would remain a subsidiary of the group.
“The primary purpose of this fundraising exercise is to raise sufficient growth capital for Teleport. The capital is required to support the expansion of third-party airline capacity (inclusive of future freighter aircraft), strengthen Teleport’s network in key global markets, and ensure Teleport is adequately capitalised for the scale-up phase ahead,” it said.
Of the total proceeds, about US$46.1mil will be allocated for working capital within 12 months, with the remainder used to cover transaction-related expenses.