KUCHING: Sarawak Consolidated Industries Bhd (SCIB) has received approval from Bursa Securities for its proposed rights issue with warrants and share capital reduction.
In its letter dated September 26, Bursa Securities approved the listing and quotation of about 763.62 million rights shares and the same number of warrants.
SCIB could potentially raise up to RM53.45 million from the proposed corporate exercise based on the issuance of the rights shares with detachable warrants on the basis of one rights share together with one warrant C for every one existing share held by the entitled shareholders on an entitlement date to be announced later.
The company has also proposed a reduction of its share capital by RM110 million to eliminate its accumulated losses, which stood at RM54.97 million at company level and RM76.97 million at group level as at March 31.
Based on an illustrative issue price of RM0.07 per rights share, SCIB could raise up to RM53.454 million (maximum scenario). SCIB shares closed at 13.5 sen last Friday.
To ensure it meets the minimum subscription level to raise at least RM10 million, SCIB executive chairman and major shareholder Datuk Chong Loong Men has undertaken to subscribe in full for his entitlement of rights shares and, if required, additional rights shares not taken up by other entitled shareholders by way of excess rights share application.
SCIB will utilise the proceeds from the fund-raising exercise to finance the construction of a new manufacturing plant and the purchase of factory machinery.
If the maximum of RM53.454 million is raised, RM20 million will be allocated to partly finance the new factory project, RM19 million for repayment of bank borrowings, RM13.574 million for working capital, and RM880,000 to cover the estimated expenses for the corporate exercise.
The construction cost of the factory is estimated at RM38.62 million, while the purchase of machinery is estimated at RM18.95 million, bringing the total to RM57.57 million.
SCIB had said earlier that any shortfall in the group’s funding requirements for the factory project is expected to be met via internally generated funds, bank borrowings and/or future fund-raising exercises, if required.
For the new factory project, SCIB had earlier accepted an offer from the Sarawak Land and Survey Department for the acquisition of five industrial leasehold plots measuring some 21.88 acres at Demak Laut Industrial Park Phase IIb (Stage 2) for RM21.62 million. The land was offered as part of SCIB’s plan to relocate its existing factory in Pending Industrial Park here.
The new factory is expected to have a built-up area of approximately 16,300 square metres, enabling the group to expand its production capacity to meet the anticipated increase in market demand for concrete-related products.
SCIB’s core business is in the manufacture and sale of precast concrete products as well as industrialised building system (IBS) components.
