KUALA LUMPUR (Feb 14): Rex Industry Bhd plans to undertake a two-for-nine rights issue to raise RM20.83 million for investments, debt repayment and working capital.
As an incentive for shareholders to subscribe to the rights issue, the canned food manufacturer has attached a three-for-four bonus issue to the rights issue.
In a filing today, Rex said the exercise would strengthen its financial position with enhanced shareholders' funds, and reduce its gearing level that is expected to facilitate the group’s continuous long-term growth and expansion plans.
The rights issue involves 54.81 million rights shares at an indicative issue price of 38 sen per rights share.
For illustrative purposes, based on the indicative issue price and the five-day volume weighted average market price of Rex shares up to Feb 2 of about 56.7 sen, the theoretical ex-all price of the share is about 47 sen.
The indicative issue price of 38 sen thus represents a 19.1% discount to the theoretical ex-all price.
Barring unforeseen circumstances, the exercise is expected to be completed by the third quarter of 2018.
Rex shares closed unchanged at 56.5 sen today, for a market capitalisation of RM139.34 million.