KUALA LUMPUR: China-based Bursa Malaysia-listed XingHe Holdings Bhd will grant 2.34 million call options to Australia’s Macquarie Bank Ltd, entitling the bank to subscribe to up to 234 million new shares or 9.96% in the company. The gross proceeds to be raised from the proposed arrangement is up to RM46.8 million, based on the minimum commitment amount of RM25 million by Macquarie Bank, and the assumption that the entire 234 million shares are issued pursuant to the call options at an illustrative issue price of 20 sen per share. The proceeds will be utilised for business expansion.

In a filing with Bursa Malaysia yesterday, XingHe, which produces edible vegetable oil and peanut protein cake in China, said Macquarie Bank has committed to exercise a sufficient number of call options to provide XingHe with a consideration of at least RM25 million within a period of 130 trading days or approximately six months.  The “committed exercise period” starts within 10 trading days of the issue date of the call options, which will expire two years from the announcement date. The arranger for the proposed call options is Macquarie Capital Securities (M) Sdn Bhd (Macquarie Malaysia), a member of the Macquarie group of companies. XingHe is also proposing to undertake a bonus issue of up to 1.29 billion warrants on the basis of one warrant for every two existing shares held by entitled shareholders. Assuming full exercise of up to 1.29 billion warrants at an exercise price of 15 sen, XingHe would raise gross proceeds of approximately RM193.7 million.

XingHe said the proposed bonus issue of warrants is expected to be completed by the fourth quarter of this year while the completion date of the proposed call option arrangement is dependent on the timing of the full exercise of the call options and shall in any case be not later than November 2016, being the expected option expiry date.

Trading of XingHe’s securities was halted from 2.40pm to 3.40pm yesterday. It ended the day 0.5 sen lower at 23.5 sen, translating to a market capitalisation of RM551.9 million. — by Charlotte Chong


This article first appeared in The Edge Financial Daily, on October 2, 2014.