Thursday 28 Mar 2024
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KUALA LUMPUR (Oct 01): China-based XingHe Holdings Bhd has proposed to grant 2.34 million call options to Australia’s Macquarie Bank Ltd, entitling the later to subscribe for up to 234 million new shares of 10 sen each in the company.

The 234 million new shares represent approximately 9.96% of XingHe’s issued and paid-up share capital as at Sept 29, 2014.

The arranger for the proposed call option arrangement is Macquarie Capital Securities (M) Sdn Bhd (Macquarie Malaysia), a member of the Macquarie group of companies.

In a filing to Bursa Malaysia, XingHe which produces edible vegetable oil and peanut protein cake in China, said Macquarie Bank has committed to exercise a sufficient number of call options to provide XingHe with a consideration of at least RM25 million within a period of 130 trading days, which is approximately six calendar months.

The “committed exercise period” shall start within ten trading days, following the issuance date of the call options. The call options will expire on a date, two years from the announcement date.

The gross proceeds to be raised form the proposed call option arrangement is up to RM48.6 million, based on the minimum commitment amount of RM25 million by Macquarie Bank, and the assumption that the entire 234 million shares are issued pursuant to the call options, at an illustrative issue price of 20 sen per share. The proceeds will be utilised for business expansion.

In addition, XingHe is also proposing to undertake a bonus issue of up to 1.29 billion warrants, on the basis of one-warrant for every two existing shares held by entitled shareholders. Assuming full exercise of up to 1.29 billion warrants at an exercise price of 15 sen, XingHe would raise gross proceeds of approximately RM193.7 million.

XingHe said the proposed bonus issue of warrants is expected to complete by the fourth quarter of 2014, while the completion date of the proposed call option arrangement is dependent on the timing of the full exercise of the call options and shall in any case be not later than November 2016, being the expected option expiry date.

Trading of XingHe’s securities was halted from 2.40pm to 3.40pm today. It then closed 0.5 sen lower at 23.5 sen, translating to a market capitalisation of RM551.9 million.

 

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