This article first appeared in The Edge Financial Daily on October 11, 2017

KUALA LUMPUR: Cuscapi Bhd has proposed to issue 300 million new ordinary shares and 60 million new warrants to a group of investors, including veteran investor Tan Sri Koh Kin Lip, to raise up to RM79.8 million fresh capital. The new shares will be issued at 25 sen per share, with the warrants at eight sen each.

The IT solutions company announced to Bursa Malaysia that the bulk of the new shares issued will be subscribed by Datuk Jayakumar Panneer Selvam through a private vehicle called Ultimate Quality Success Sdn Bhd (UQS).

UQS intends to subscribe to 200 million new shares and 40 million new warrants, Cuscapi said in the announcement to Bursa yesterday.

Jayakumar is also a substantial shareholder of Excel Force MSC Bhd.

The subscription would make UQS the group’s largest shareholder with a holding of between 24.47% and 28.47%, depending on the exercise of the employee share option scheme. Meanwhile, Koh, founder of Rickoh Holdings Sdn Bhd, and Datuk Dr Tan Kim Heung will subscribe to 25 million shares and five million warrants each.

Its existing substantial shareholder Ong Chin Hui, with a 4.14% stake now, is also keen on buying 50 million new shares and 10 million warrants, which will raise his shareholding to as much as 7.12%.

The proposed issuance price represents a discount of 26.47% or nine sen over its last traded price of 34 sen. Meanwhile, the warrants will have an exercise price of 27 sen.

Of the RM79.8 million to be raised, RM70.1 million will be allocated for business expansion, Cuscapi said.

“The proposals will provide us with an avenue to raise capital in a cost-effective manner,” the group said.