KUALA LUMPUR (April 15): Pegasus Heights Bhd has cut the exercise price of its free warrants that are offered as sweeteners to its rights issue from 1.5 sen to 1 sen in view of current weak market conditions.

In a filing with Bursa Malaysia today, Pegasus said the proposed variation could enhance the attractiveness of the rights issue, and help it achieve a higher subscription rate.

"In addition, the board is of the opinion that the proposed variation has no detrimental effect to the interests of the group and shareholders," it said.

On March 8, Pegasus’ shareholders approved the company’s renounceable rights issue of up to 5.99 billion shares with up to 3.99 billion free warrants — on the basis of three rights shares and two warrants for every existing Pegasus share held — at an exercise price of 1.5 sen for each warrant, and a rights issue price of 1 sen apiece.

As at April 12, the rights issue that can raise up to RM59.9 million for the company, has yet to be implemented, said Pegasus.

The proposed variation to the exercise price is now subject to further approval being obtained from its shareholders at an extraordinary general meeting to be convened.

Pegasus said the proceeds from the exercise, in which the amount has yet to be determined, will be utilised as additional working capital for the company and its subsidiaries which include payment to suppliers and trade creditors, selling, general and administrative expenses as well as other operating expenses.

Shares of Pegasus closed unchanged today at 2.5 sen with a market capitalisation of RM44.98 million.