SINGAPORE (Sep 25): Singapore eDevelopment (SeD) is planning to issue listed and secured perpetual bonds of up to $300 million with an 8% annual coupon and a share of annual profits of property development projects to be funded, as well as a 100-to-one consolidation of its shares, to accelerate its strategy for corporate recovery.

SeD, the construction and international property development, and Information Technology company, intends to issue the perpetual bonds in denominations of $100 each which will entitle the bond holder to receive annual distribution of 8% – payable twice a year in arrears – and be conferred the right to receive a pro-rated 30% of earnings generated from the deployment of the bonds into property development projects in US, Australia, China and Singapore.

The perpetual bonds will be secured with the property development projects funded by proceeds raised from the issuance of these bonds.

Chan Heng Fai, CEO and single largest shareholder of SeD, says: “This bond offering is a unique capital structure which will allow SeD to raise funds from a secured fixed-income instrument in which profits from property projects are shared between SeD and bond holders. At the same time, SeD will be able to raise funds without share dilution.”

On 12 September 2014, SeD completed a rights issue that raised $40.6 million in net proceeds.

Meanwhile, SeD said its second proposal for a 100-to-one share consolidation, which will reduce its issued share base from 28.5 billion to 285.3 million, will raise the profile of the company among institutional investors, reduce share price volatility, lower transaction costs, reduce the bid/ask spreads from 30% to 50% currently to 1% and enhance trading liquidity.

SeD is up 100% to 0.2 cents as at 10:32 am Singapore time.