KUALA LUMPUR (Apr 22): Halex Holdings Bhd has proposed a renounceable rights issue of new ordinary shares of 50 sen each with free detachable warrants to raise gross proceeds of up to RM40 million, according to a Bursa Malaysia filing this afternoon.

“The issue price for the rights shares and the exercise price for the free warrants have not been fixed at this juncture to provide flexibility to the board in respect of the pricing of the rights shares and warrants as well as the number of rights shares and warrants to be issued,” it said in its filing.

“The actual gross proceeds to be raised will depend on the final issue price and the total number of rights shares to be issued,” it added.

In addition to the rights issue and enlarged share capital proposals, Halex (fundamental: 1.15; valuation: 2) also said it was seeking to establish and implement an employees’ share scheme of up to 10% of the company’s total issued and paid-up share capital.

“The proposed ESS will involve the granting of option(s) to subscribe for and/or award of Halex Shares (scheme shares) to the employees and executive directors of the company and its non-dormant subsidiary companies who fulfil the criteria for eligibility for participation in the scheme,” it said.

Meanwhile, the group also proposed to enlarge its share capital to RM500 million comprising one billion shares, from RM100 million divided into 200 million shares of which RM53 million comprising 106 million shares have been issued and fully paid-up including 27,500 treasury shares.

This will be done to accomodate “the issuance of the rights shares, the scheme shares and the exercise of warrants and ESOS options”.

The proposals are expected to be completed by the fourth quarter of this year.

At the noon break, Halex shares were 2.5 sen or 4.07% down at 59 sen with 176,100 shares done.

(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.)