KUALA LUMPUR (April 5): G Capital Bhd (GCAP) has proposed to issue up to 1.41 billion redeemable convertible unsecured loan stocks (RCULS) at eight sen each on the basis of four RCULS for one existing ordinary share.

The proposed rights issue will raise up to RM112.88 million under the maximum subscription level.

Proceeds from the exercise will be used to part-finance project costs (from RM4.75 million up to RM100.42 million) and for working capital requirement, GCAP said in its filing.

Under the maximum subscription scenario, RM112.88 million raised will be utilised to part-finance the group’s 20MW mini-hydropower plant projects in Perak, namely Sg Perak Salu (10MW), Sg Temelong and Sg Ibul (8MW) and Sg Geroh (2MW). The project costs are estimated to be at RM334.725 million.

GCAP has also secured undertaking from five shareholders who own a 16.77% stake in the company to subscribe for their full entitlement of 15.2% of the RCULS for RM17.21 million.

The five shareholders are: GCAP executive director Datuk Yap Yee Ping (4.22%), Ban-Seng Packaging Sdn Bhd (4.07%) and Percetakan Sanwa Industries Sdn Bhd (5.24%), as well as siblings Lee Poh Hin (1.96%) and Lee Yee Long (1.28%) who are also shareholders of Ban-Seng and Sanwa Industries.

It said any shortfall from the proposed rights issue earmarked for the project costs “will be funded via a combination of internally-generated funds and/or further bank borrowings”.

In a separate statement, GCAP’s Executive Director Datuk Yap Yee Ping said the company is close to commence the construction of the mini-hydropower plant projects, slated to contribute to the group from 2026 onwards.

“Upon reaching commercial operation dates, we are expecting these plants to generate revenue of RM653.62 million for the 21-year renewable energy power purchase agreement signed with Tenaga Nasional Bhd,” he said.

On the RCULS, GCAP said it will pay quarterly coupons, amounting to 8% per annum through its 5-year tenure.

The RCULS are can be converted to new GCAP shares on a one-to-one basis, within a range from the five-day volume-weighted average market price (VWAMP) of GCAP shares up to a premium of not more than 20% of the theoretical ex-rights price (TERP).

For the purpose of illustration, the RCULS are assumed to be converted at an indicative conversion price of 57 sen per share, which represents a premium of 19.5% to the TERP of 47.7 sen GCAP share, calculated based on the 5-day VWAMP.

Shares of GCAP closed lower by 2.27% or 1 sen to 43 sen, giving the company a market capitalisation of RM136.33 million.