Thursday 28 Mar 2024
By
main news image

This article first appeared in The Edge Financial Daily on May 28, 2019

KUALA LUMPUR: Scomi Group Bhd is making a cash call to raise RM214 million, nearly three times more than its current market capitalisation of RM72 million, to pare down debts.

In a filing with Bursa Malaysia yesterday, Scomi Group proposed a wide-ranging corporate exercise, including a rights issue sweetened by free warrants, share consolidation, liabilities settlement and shares capital reduction.

The group fixed the price for its rights issue at 18 sen per share.

The proposed rights issue would involve issuing up to 1.19 billion rights shares with free warrant C of up to 396.30 million units. For every three rights shares subscribed, shareholders will be given a free warrant C.

To pave the way for the cash call, Scomi Group will undertake a capital reduction to slash its paid-up capital to RM40 million from RM224.96 million currently, and a share consolidation on the basis of four shares to consolidate into one share prior the rights issue.

As at May 23, 2018, being the latest practicable date prior to this announcement, its issued share capital was RM224.96 million comprising 1.03 billion shares.

Of the total RM214 million raised, the group will allocate RM104.44 million for working capital, RM62.17 million for the repayment of advances from its 65.65%-owned subsidiary Scomi Energy Services Bhd, RM23 million for cash settlement to Malayan Banking Bhd (Maybank) pursuant to the proposed liabilities settlement, RM22.70 million for partial repayment to non-trade creditors and the remaining for the expenses of the proposed exercises.

Scomi Group added it had procured the undertaking letters from the shareholders to subscribe for their own entitlements respectively and excess shares application, where relevant, for a total of RM54.59 million.

The group’s largest shareholder IJM Corp Bhd, with a 21.39% stake, together with Sharp Ascend Ltd (SAL) and Scomi Group chief executive officer Sammy Tse Kwok Fai, have provided an irrevocable undertaking to subscribe for their respective entitlements to the rights shares.

Of the total RM54.59 million, SAL, a Hong Kong company, will be paid RM20 million as advances to Scomi Group, while Tse will provide RM3 million as advances to Scomi Group.

On the liabilities settlement, 83.33 million new consolidated shares will be issued to Maybank pursuant to the Maybank settlement (about RM15 million), as well as an issue up to 8.36 million new consolidated shares as repayment for outstanding professional fees of approximately RM1.51 million due and payable to Astramina Advisory (outstanding fees) pertaining to an earlier corporate advisory work for Scomi Group.

The board has appointed MIDF Investment as the principal adviser and Astramina the financial adviser for the proposals.

In addition, Astramina is also appointed the financial adviser to IJM for the proposed subscription by IJM for the proposed rights issue of shares with warrants.

Shares in Scomi Group closed at 7.5 sen yesterday, with a market capitalisation of RM72.02 million.

      Print
      Text Size
      Share