KUALA LUMPUR (Apr 25): Convenience store chain operator 7-Eleven Malaysia Holdings Bhd is planning to undertake a rights issue of new warrants at an issue price of 10 sen for each warrant, to raise up to RM61.67 million for working capital purposes.

The proposal entails the issuance of up to 616.69 million warrants on the basis of one warrant for every two existing shares, said 7-Eleven in a Bursa Malaysia filing today.

It said its working capital requirements include payments to suppliers and the financing of operating expenses such as rental, store utilities, insurance, store maintenance and royalties payable.

The exercise price for these warrants are set at RM1 per warrant, after taking into consideration the theoretical ex-rights price of 7-Eleven shares of RM1.48, calculated based on the five-day volume weighted average market price up to and including April 18 of RM1.66.

The group said it wants to procure irrevocable undertakings from certain shareholders, namely Berjaya Retail Bhd, Berjaya Credit Sdn Bhd, Berjaya Times Square Sdn Bhd and Tan Seri Vincent Tan Chee Yioun, to subscribe in full for their respective entitlements in the proposed exercise.

Subsequent to the proposed rights issue, 7-Eleven’s gearing is estimated to be reduced to as low as 0.4 times, from 3.29 times as at Dec 31 last year.

The proposal requires shareholders’ approval. The group expects to complete the plan in the third quarter of this year.

7-Eleven’s share price slid one sen or 0.59% to RM1.69 today, giving it a market capitalisation of RM1.88 billion.