Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Feb 4): Poultry farmer Lay Hong Bhd has proposed a private placement of up to 15.75 million new shares or 30% of the company's enlarged share capital, a move that may have a dilutive effect on QL Resources Bhd's stake in the firm. 

According to Lay Hong's filing to Bursa Malaysia this evening, Lay Hong said the private placement would help it comply with Bursa Malaysia's requirement for a public listed company to have a 25% public shareholding spread. As at Dec 31 2014, the public shareholding spread is 15.42%.
 
"In addition, the proposed private placement will enable Lay Hong to raise gross proceeds up to RM48.98 million for the group's working capital requirements … and will further strengthen the capital base of the company," it said.
 
Lay Hong said these new shares will be placed out to "independent third party investors" which will be identified later. None of the company's existing directors, substantial shareholders or chief executive of Lay Hong as well as persons connected to them will be entitled to these new shares. 

The issue price of the placement shares will be determined based on market-based principles and fixed later. However, whatever proceeds raised from the exercise is expected to be utilised as working capital within 12 months, it noted.

To recap, QL had launched a conditional general offer for Lay Hong shares at RM3.50 per share in September last year after its sole representative on Lay Hong's board, Chia Mak Hooi, was not re-elected as a director at Lay Hong's annual general meeting two days prior to that. At the time, QL held a 26.81% stake in Lay Hong.

QL then started to accumulate Lay Hong shares and eventually exceeded the 33% shareholding threshold, thereby turning QL's takeover offer from a voluntary one to a mandatory one. But the takeover bid fell through after QL failed to receive valid acceptances from Lay Hong's shareholders to meet the required 50% of all outstanding shares with voting rights.

As at Dec 31, 2014, QL is the second biggest shareholder in Lay Jong, with a 38.7% stake. The biggest shareholder is the Yap family with over 45% stake.

Meanwhile, in its Bursa filing today, Lay Hong has also proposed to terminate its existing employee share option scheme, to be replaced with a new share issuance scheme (SIS) of up to 15% of its issued share capital for eligible directors and employees of the holding company and subsidiaries.

Under the new scheme, shareholders will have to approve entitlements under SIS for Lay Hong's major shareholders, directors and chief executive or its holding company or persons connected to any of them.
 
Lay Hong added that the rationale of implementing a new SIS is to "provide the eligible persons with an opportunity to have equity in the company".
 
Lay Hong's plans will be subject to approval from Bursa Malaysia and its own shareholders. The company said these proposals will be completed in the second quarter of 2015 "barring any unforeseen circumstances".

      Print
      Text Size
      Share