Friday, October 21, 2011

Melewar Industrial Group plans rights issue to raise RM27.4m

KUALA LUMPUR: MELEWAR INDUSTRIAL GROUP BHD [] has proposed a two-call rights issue of up to 151.17 million rights shares to raise RM27.46 million.

It said on Friday, Oct 21 the rights issue would be at an indicative issue price of RM1 per rights share on the basis of two rights shares for every three existing shares held on an entitlement date to be determined later.

However, its substantial shareholders Melewar Equities (BVI) and Melewar Khyra Sdn Bhd were seeking an exemption from undertaking a mandatory take-over offer due to the increase in their interests in the voting shares following the rights issue.

Melewar Industrial Group said the proposed rights issue was the most appropriate to raise funds while potentially enhancing the company's capital base.

It said the corporate exercise would recapitalise the shareholders' equity base and enable the group to raise the necessary funds to meet its working capital requirements.

The company would also be able to raise funds without incurring interest expenses as compared to bank borrowings.

Based on the indicative issue price of RM1, the indicative first call of 50 sen per rights share, the theoretical ex-rights price of the shares was 52 sen, a discount of 3.85% to the five-day weighted average market price of the shares of 54 sen.

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