Friday 29 Mar 2024
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KUALA LUMPUR (May 24): D'nonce Technology Bhd announced today it aims to raise gross proceeds of at least RM8 million via a renounceable rights issue to repay bank borrowings.

This involves the issuance of up to 315.11 million rights shares and 315.11 million irredeemable convertible preference shares (ICPS), on the basis of one rights share and one ICPS for every existing ordinary share in D'nonce.

The rights issue comes with free detachable warrants on the basis of one free warrant-B for every two rights shares and two ICPS subscribed.

In an exchange filing today, D'nonce said the final issue price is yet to be fixed, but the minimum issue price is five sen per rights share.

D'nonce may fix the issue price subject to a maximum allowable discount of not more than 80% to the theoretical ex-all price of D'nonce shares based on the five-day volume weighted average market price of D'nonce shares immediately preceding the price-fixing date.

"The company intends to raise minimum gross proceeds of RM8 million from the proposed rights issue to meet the minimum level of funds that the company and its subsidiaries, which will be channelled towards the proposed utilisation of proceeds as set out [in the announcement].

"The minimum subscription level will be met via the irrevocable undertaking from Asia Poly Holdings Bhd and Lim Teck Seng, to subscribe in full for their entitlement under the proposed rights issue.

"The company will procure underwriting arrangement for the remaining rights shares and ICPS with warrants required to meet the minimum subscription level," it said.

D'nonce said its total bank borrowings, as at May 23, amounted to RM60.13 million.

The group said it is in the midst of paring down its borrowings, which have been reduced from a high of RM90.75 million as at Aug 31, 2016, to RM65.10 million as at Dec 31, 2018.

"The proposed rights issue will further reduce the borrowings of D'nonce, which will increase the profitability of the group via the interest savings of up to RM2.05 million per annum, assuming the maximum scenario.

"After due consideration of the various options available as well as the capital structure of the company, the board is of the opinion that the proposed rights issue is the most appropriate means of raising funds," it added.

At 3.13pm, D'nonce shares were up 1.5 sen or 3.19% at 48.5 sen, bringing a market capitalisation of RM122.12 million.

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