KUALA LUMPUR (April 1): Dagang NeXchange Bhd (DNeX) said today it had issued 16.6 million new shares at 50 sen each in conjunction with the exercise of the company’s warrants as investors weighed the company’s outlook against its proposed diversification into semiconductor wafer manufacturing in conjunction with the DNeX-led consortium planned acquisition of an entire stake in semiconductor foundry SilTerra Malaysia Sdn Bhd for RM273 million from Malaysia sovereign wealth fund Khazanah Nasional Bhd.
IT company DNeX, which also undertakes oil and gas operations, said yesterday in a Bursa Malaysia filing that the consortium had signed the conditional share sale and purchase agreement with Khazanah.
Today, DNeX said in a bourse filing that the 16.6 million new shares from the warrant exercise will be listed tomorrow and that following the issuance of the new shares, the company’s latest issued share capital stands at 2.24 billion shares.
At a glance, the exercise of the company’s 2016/2021 warrants is not unexpected as investors capitalised on the surge in DNeX’s share price since February 2021.
The stock’s price stood at 27 sen on Feb 2, 2021.
At Bursa’s 12:30pm break today, DNeX’s share price settled up 2.5 sen or 2.75% at 93.5 sen for a market capitalisation of about RM2.09 billion.
The second most-actively traded stock on the exchange saw some 188 million shares done after the stock was transacted between 97.5 sen and 92 sen so far today.
Meanwhile, DNeX’s warrant price rose 0.5 sen or 1.45% to 35 sen with some 57 million units changing hands.
Yesterday, DNeX said in a bouse filing that DNeX and consortium partners Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Ltd Partnership) — also known as CGP Fund — had together on March 31, 2021, entered into the conditional share sale and purchase agreement (SSPA) with Khazanah for the RM273 million all-cash deal.
In conjunction with the proposed acquisition, DNeX said it intends to diversify its existing principal activities to include the manufacture, sale and marketing of semiconductor wafers, semiconductor-related tools and any other related activities.
"In addition, DNeX also intends to undertake a fundraising exercise via a private placement which involves the issuance of new ordinary shares in DNeX representing up to 30% of the total number of issued shares of DNeX to third party investor(s) to be identified later at an issue price to be determined later, of which the proceeds arising thereto are mainly intended to finance the proposed acquisition, either in whole or in part, subject to the successful procurement of placee(s) and implementation of the placement prior to completion of the proposed acquisition.
"Subject to the terms and conditions of the SSPA, the equity interest in the sale shares attributable to DNeX's and CGP Fund's acquisition portion shall be 60% and 40% respectively, pursuant to the proposed acquisition. Both DNeX and CGP Fund shall nominate its own subsidiary, namely DNeX Semiconductor Sdn Bhd (formerly known as DNeX Clean Utilities Sdn Bhd) (DNeX SPV) and Tethystronics Technologies Co Ltd (CGP Fund SPV) respectively, as the special purpose vehicles intended to be the recipient of the sale shares attributable to their acquisition portion.
"In this regard, the purchase consideration attributable to DNeX's 60% interest in the sale shares pursuant to the proposed acquisition shall amount to RM163.8 million,” DNeX said.
According to DNeX, the purchase consideration amounting to RM163.8 million will be funded by DNeX through a combination of proceeds to be raised from the private placement besides bank borrowings and the company’s internally generated funds.
DNeX’s latest balance sheet shows that the company’s cash and cash equivalents stood at RM66.19 million as at Dec 31, 2020 compared to RM54.4 million a year earlier.