KUALA LUMPUR (Jan 27): Automotive batteries manufacturer GPA Holdings Bhd plans to raise up to RM19.6 million by issuing 196.1 million renounceable rights shares on the basis of one rights share for every four existing shares.

GPA (fundamental: 0.95; valuation: 1.2) has also proposed to issue 490.24 million free warrants on the basis of five warrants for every rights share subscribed.

According to its filing with Bursa Malaysia today, the company also proposed to increase the authorised share capital of the company and amend its memorandum and articles following the rights issue with warrants.

It said the issue price of the rights shares has been determined by the board at 10 sen each.

GPA said the proceeds from the rights shares would be used to repay bank borrowings and for working capital, with some RM4 million set aside for the exercises’ expenses.

The rationale for the proposed rights issue with warrants include cost savings as it will be able to raise funds without incurring interest costs compared to bank borrowings or the issuance of debt instruments.

GPA’s counter closed unchanged today at 9.5 sen each, for a market capitalisation of RM74.52 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)