Ho Hup Construction calls off RM136m rights issue

-A +A

KUALA LUMPUR (Oct 12): Ho Hup Construction Co Bhd has called off a RM136 million cash call after the extension of time to implement the corporate exercise lapsed, adding that it will explore alternative options to fund its construction and property development projects.

In a filing with Bursa Malaysia today, Ho Hup said Bursa Securities’ approval on the extension of time to implement the corporate exercises has lapsed.

"In relation thereto, the board wishes to inform that the company had decided not to proceed with the corporate exercises as it intends to explore alternative options to meet its funding requirements," it added.

On Jan 26, 2016, the company had announced a fund-raising exercise involving a proposed rights issue of shares and  rights issue of redeemable preference shares (RPS). Part of the proceeds raised would be used to fund its construction and property development projects on hand.
 
The proposed rights issue of up to 85.14 million shares would be offered on a basis of one rights share for every  five existing Ho Hup shares. Each rights share subscribed will be entitled to one free detachable new warrant (Warrants B).

The proposed RPS issue of up to 85.14 million RPS of one sen each would be offered at the same ratio, with every RPS subscribed also entitled to one free detachable warrant (Warrants C).

For illustrative purposes, the exercise was expected to raise RM110.98 million under a minimum scenario and RM136.22 million under a maximum scenario based on an indicative issue price of 80 sen for the rights share and RPS.

The exercise was initially expected to be completed in the second quarter of 2016.

Ho Hup shares closed 1.5% or one sen lower at 67 sen today, valuing it at RM251.16 million.