KUALA LUMPUR (Oct 17): KNM Group Bhd has proposed a 1-for-5 renounceable rights issue of up to 430.49 million new shares, together with free warrants on the basis of one warrant for every two rights shares subscribed. The exercise is to raise between RM233 million and RM310 million, revealed Bursa Malaysia.
“The actual gross proceeds to be raised from the proposed rights issue with warrants will depend on the final issue price for the rights shares and the actual number of rights shares to be issued.” said KNM.
“Assuming an indicative issue price of 72 sen per rights share, the proposed rights issue is expected to raise gross proceeds of between RM232.61 million and RM309.95 million, respectively,” it added.
About half of the proceeds raised will repay borrowings while the other half is to be used as working capital.
According to KNM, the proposed rights issue with attached warrants is intended to be undertaken on a full subscription basis.
"KNM will procure written irrevocable undertakings from its major shareholders, namely Inter Merger Sdn Bhd, Lee Swee Eng and Gan Siew Liat to subscribe or procure subscription in full for their respective entitlements to the rights shares.
"Further, KNM will also procure written irrevocable undertakings from Tegas Klasik Sdn Bhd, McDermott Industries Ltd and Aveda Assets Capital Inc, of which these companies are related to Lee to subscribe or procure subscription in full for their respective entitlements to the rights shares," said KNM.
KNM closed 5 sen higher at 74.5 sen today, with a market capitalisation of RM1.2 billion.