KUALA LUMPUR (Aug 11): Asia Bioenergy Technologies Bhd (AsiaBio) is planning a rights issue of irredeemable convertible preference shares (ICPS) with warrants to raise up to RM81.43 million, to be mainly used as investments in companies listed on Bursa Securities' Leading Entrepreneur Accelerator Platform (LEAP Market).
In a bourse filing, AsiaBio said the exercise will involve the issuance of up to 1.16 billion new ICPS and up to 116.32 million free detachable warrants (Warrants B), on the basis of 10 ICPS together with one free Warrant B for every five existing shares held by the entitled shareholders.
AsiaBio said the issue price of the ICPS and the entitlement date will be decided later after obtaining all approvals for the exercise.
However, it added that based on the illustrative issue price of the ICPS of 7 sen and the conversion ratio of two ICPS for every one new share, the implied conversion price of 14 sen represents a premium of about 4% to the theoretical ex-all price (TEAP) of AsiaBio shares of 13.46 sen, calculated based on its five-day volume-weighted average market price (VWAP) up to and including the latest practicable date (LPD) on July 13 of 13.62 sen.
As for the warrants, based on the illustrative exercise price of 10 sen per Warrant B, this represents a discount of approximately 25.7% to the TEAP of 13.46 sen, also according to the five-day VWAP of AsiaBio shares up to and including the LPD.
Of the total proceeds, AsiaBio said it plans to use up to RM56.2 million to invest in the LEAP Market-listed companies.
LEAP Market was launched on July 25 as an alternative for small and medium enterprises (SMEs) to raise funds via a listing on Bursa Malaysia.
The group explained that it fulfils the requirements set by Bursa Securities for "Sophisticated Investor" as defined under the LEAP Market listing requirements, based on its financial statement for the financial year ended March 31, 2017, where its total net assets stood at RM51.45 million.
"This investment is in line with the group's current investment strategy of preserving value via its medium- to long-term holdings in quoted securities, which aims to mitigate downside risks for the group's incubation funds," AsiaBio said.
"The company will have access to a wider pool of potential investments in a transparent and regulated environment. Further, the LEAP Market will be adviser-driven where suitability and commercial viability assessment will be done by the approved advisers," it added.