KUALA LUMPUR (Jan 16): Seacera Group Bhd proposed two corporate exercises to trim its debts today, with one being the issuance of new shares to repay its creditors, and the other a private placement of up to 30% of its existing paid up share base to selected investors to repay bank borrowings.

The first exercise will settle about RM31.31 million owed by Seacera and two of its subsidiaries — Seacera Ceramics Sdn Bhd and Seacera Properties Sdn Bhd — to certain creditors, with the issuance of the shares at an issue price of 21 sen per share.

In the second proposal, it will issue up to 126.34 million new shares to potential investors to be identified, at an indicative issue price of 19.5 sen per share, which could raise up to RM24.64 million for the group, of which RM20 million will be for the repayment of bank borrowings. The remainder will be used for working capital.

The exercises are expected to help the group reduce its gearing level of 0.09 times as at Dec 31, 2017, down to as low as 0.05 times — assuming the full exercise of its outstanding warrants and employee share option scheme options — the group said in a filling with Bursa Malaysia.

Seacera said the repayment of bank borrowings is also expected to result in an annual interest savings of about RM1.58 million, based on the interest rate of 7.9% per annum for the group's outstanding borrowings of RM48.63 million as at Jan 4, 2019.

Seacera shares slipped one sen or 4% to close at 24 sen today, valuing the group at RM101 million. The counter has fallen over 69% over the past year.