KUALA LUMPUR (Sept 9): Tech innovator and digital transformation enabler Techna-X Bhd is issuing 37.09 million new shares to pay off RM1.02 million owed by the company to an individual, Chan Kok San, at 2.75 sen per share.

In a Bursa Malaysia filing on Friday (Sept 9), Techna-X said it had on Thursday entered into a capitalisation agreement with Chan to settle the amount owed. The issue price of 2.75 sen represents a 9.24% discount to the five-day volume weighted average market price of Techna-X shares of 3.03 sen on Sept 8.

"The proposed debt settlement is not expected to have any material effect on the earnings of Techna-X for the financial year ending Dec 31, 2022. However, the earnings per share of Techna-X may be diluted as a result of the [exercise]," it added.

As at June 30, 2022, Techna-X had total current borrowings of RM1.56 million, and its bank balances and cash stood at RM6.79 million. However, it has opted for the debt settlement route to preserve its cash for other purposes such as working capital requirements.

The proposed debt settlement is expected to be completed by the fourth quarter of 2022.

M&A Securities Sdn Bhd has been appointed as the adviser to the company for the proposed exercise.

At 4.41pm, Techna-X shares were trading at three sen, bringing it a market capitalisation of RM66.44 million.