KUALA LUMPUR (Aug 4): PUC Founder (MSC) Bhd is planning a renounceable rights issue of irredeemable convertible unsecured loan stocks (ICULS), along with free detachable warrants, to raise up to RM127.59 million, mainly to fund the construction of its solar photovoltaic (PV) plants.
In a filing with Bursa Malaysia today, PUC Founder said it intends to issue up to RM127.59 million nominal value of the ICULS, on the basis of two ICULS for each ordinary share held by entitled shareholders, on a date to be fixed later.
The ICULS has a tenure of three years, with a coupon rate of 4% on the nominal value per annum. They will be issued at 100% of the nominal value of five sen each.
PUC Founder has fixed the conversion price of the ICULS at 10 sen for one new share, after taking into consideration the theoretical ex-rights price of 11.21 sen per share after the proposal, calculated based on the five-day Volume Weighted Average Market Price (VWAMP) of its existing shares up to and including Aug 3, 2015 — the last trading date prior to this announcement.
The ICULS comes with free detachable warrants, on the basis of one warrant for every eight rights ICULS subscribed.
The warrant has a tenure of three years, and an indicative exercise price of 10 sen.
The bulk of the fund raised through the corporate exercise will be utilised as capital expenditure for the construction of its solar PV plants (up to RM105 million), followed by working capital (up to RM21.59 million) and defrayment of expenses incurred for the proposals (RM1 million).
“This intended construction of solar PV plant is in conjunction with the group’s intention to diversify its business operations to include the provision of energy utility services,” the filing read.
The capacity of the solar PV plants range from a minimum of 4MW to a maximum of 15MW, depending on the quantum of proceeds to be raised from the proposed rights issue of ICULS.
“The proposed diversification is expected to provide an additional stream of income and cash flow, which is expected to bode well for the financial position of the group moving forward, and at the same time, reduce the group’s over reliance on its existing core business,” PUC Founder said.
The group's core business involves the marketing of fingerprint verification products, and the provision of IT solutions on electronic publishing and management information system to the Chinese language publishing industry.
PUC (fundmental: 1.85; valuation: 1.1) gained half sen or 4% to closed at 13 sen today, giving it a market capitalisation of RM133.23 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.)