Capitaland rumoured to consider rights issue

SINGAPORE (Dow Jones)--CapitaLand Ltd. (C31.SG) is considering a rights issue to raise about S$1.5 billion by offering one new rights share for every four existing shares at S$2.20 each, people familiar with the situation said Friday. "The consideration is for the capital increase to take place around mid-February, but there is no firm decision," one person said. Shares of the developer traded down 2.4% at S$2.44 each at 0235 GMT. A spokesman couldn''t be immediately reached for comment. Last month, it said it wouldn''t comment on market rumor or speculation, after Dow Jones Newswires reported the company was mulling the rights issue. CapitaLand had about 2.8 billion shares outstanding and S$4.2 billion in cash and cash equivalents at Sept. 30. Analysts say CapitaLand isn''t in need of capital, but raising more money would allow it to buy distressed assets in attractive markets and put the company in a better position to face challenges in the current property market. The sector in Singapore and the region has cooled considerably since last year. Chief Executive Liew Mun Leong has said the company could consider acquiring some distressed real estate companies in Asia, including China and Australia. If the issue takes place, it would be the second major Singapore company to raise money through a rights issue in recent months. In late December, DBS Group Holdings Ltd. (D05.SG) said it planned to raise about S$4 billion to bulk up its capital base.