10 Jul 2014 12:20
10 July 2014
Resource Holding Management Limited
("RHM" or the "Company")
Announcement by PUC Founder (MSC) Berhad re proposed private placement, proposed bonus issue of shares and proposed free warrant issue
The Board of RHM notes the announcement released earlier today by PUC Founder (MSC) Berhad ("PUCF") of a proposed private placement, proposed bonus issue of shares and proposed free warrant issues (collectively the "Proposals"). A copy of the announcement can be found copied below.
For further information please contact:
Resource Holding Management Limited | |
Cheong Chia Chieh
| Tel: +852 8192 6166 |
Allenby Capital Limited (Nominated Adviser and Broker) | Tel: +44 (0)203 328 5656 |
Nick Athanas / James Reeve / Michael McNeilly
| |
Leander PR (Financial PR) | Tel: +44 (0)7795 168 157 |
Christian Taylor-Wilkinson |
PUC FOUNDER (MSC) BERHAD ("PUC" OR THE "COMPANY")
· PROPOSED PRIVATE PLACEMENT;
· PROPOSED BONUS ISSUE OF SHARES; AND
· PROPOSED FREE WARRANTS ISSUE
(COLLECTIVELY REFERRED TO AS THE "PROPOSALS")
1. introduction
On behalf of the Board of Directors of PUC ("Board"), TA Securities Holdings Berhad ("TA Securities") wishes to announce that the Company proposes to undertake the following:
(i) Proposed private placement of up to 84,503,000 new ordinary shares of RM0.10 each in PUC ("PUC Shares" or "Shares") ("Placement Shares"), representing approximately ten percent (10%) of the issued and paid-up share capital of PUC (excluding treasury shares, if any) ("Proposed Private Placement");
(ii) Proposed bonus issue of up to 132,791,321 new PUC Shares ("Bonus Shares") on the basis of one (1) Bonus Share for every seven (7) existing PUC Shares held at an entitlement date to be determined later ("Entitlement Date") ("Proposed Bonus Issue of Shares"); and
(iii) Proposed issue of up to 132,791,321 free warrants ("Warrants") on the basis of one (1) Warrant for every seven (7) existing PUC Shares held at the same Entitlement Date as the Proposed Bonus Issue of Shares ("Proposed Free Warrants Issue").
2. DETAILS OF THE PROPOSALS
2.1 Details of the Proposed Private Placement
2.1.1 Size of placement
The Proposed Private Placement entails the issuance of up to 84,503,000 Placement Shares, representing approximately ten percent (10%) of the existing issued and paid-up share capital of PUC of RM84,503,625 comprising 845,036,250 PUC Shares as at 9 July 2014 (being the latest practicable date prior to this announcement ("LPD")) (excluding any treasury shares, if any).
It is the intention of the Company to complete the Proposed Private Placement prior to the Entitlement Date for the Proposed Bonus Issue of Shares and Proposed Free Warrants Issue.
2.1.2 Placement arrangement
The Placement Shares are intended to be placed to persons other than the following:
(i) a director, major shareholder or chief executive of PUC or a holding company of PUC ("Interested Person");
(ii) a person connected with an Interested Person; and
(iii) nominee corporations, unless the names of the ultimate beneficiaries are disclosed.
The Proposed Private Placement may be implemented in tranches within (6) months from the date of the approval from Bursa Malaysia Securities Berhad ("Bursa Securities") for the Proposed Private Placement or any extended period as may be approved by Bursa Securities, to allow the Company with the flexibility to secure interested investors over a period of time and to maximise the number of Placement Shares to be placed out.
For the avoidance of doubt, the issue price for each tranche of the Placement Shares shall be determined separately. The basis of determining the issue price of the Placement Shares will be in accordance with market-based principles.
2.1.3 Ranking of the Placement Shares
The Placement Shares shall, upon allotment and issue, rank pari passu in all respect with the existing PUC Shares save and except that the Placement Shares shall not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to the date of issuance and allotment of the Placement Shares.
2.1.4 Listing of and quotation for the Placement Shares
An application will be made to Bursa Securities for the listing of and quotation for the Placement Shares on the ACE Market of Bursa Securities.
2.1.5 Basis of pricing
The issue price of the Placement Shares shall be determined and fixed by the Board at a later date after the receipt of all relevant approvals for the Proposed Private Placement ("Price Fixing Date").
The Placement Shares will not be priced at more than ten percent (10%) discount to the five (5)-day volume weighted average market price ("5D-VWAP") of PUC Shares immediately before the Price Fixing Date. In any event, the Placement Shares will not be priced lower than RM0.10, being the par value of PUC Shares.
For illustrative purposes, the 5D-VWAP of the PUC Shares up to and including the LPD is RM0.2039 per PUC Share. Hence, for the purpose of this announcement, the indicative issue price of the Placement Shares will be at RM0.185 per Placement Share.
The indicative issue price of RM0.185 per Placement Share represents a discount of RM0.0189 or 9.27% to the 5D-VWAP of RM0.2039.
2.1.6 Utilisation of proceeds
For illustrative purposes, based on the indicative issue price of RM0.185 per Placement Share, the gross proceeds of up to RM15.63 million are expected to be utilised by PUC and its subsidiaries ("PUC Group" or the "Group") in the following manner:
Details of utilisation | Note | Gross proceeds (RM'000) | Expected time frame for the utilisation of proceeds (from the date of listing of the Placement Shares) |
Investment in new businesses | (1) | 11,333 | Within 18 months |
Working capital | (2) | 4,000 | Within 18 months |
Estimated expenses in relation to the Proposals | (3) | 300 | Within 1 month |
Total estimated proceeds | 15,633 |
Notes:
(1) The Company intends to utilise up to RM11.33 million for investment in new businesses with good growth potential in order to have new sources of revenue and profit for the Group.
The Group is still in the midst of identifying and evaluating several such business investments and the details have not been finalised at this juncture. Once such investments have been identified and the details finalised, the Company will make the appropriate announcements in due course.
One likely new business investments which is still in the evaluation stage is to set up a solar power plant in Malaysia to participate in the Feed-in Tariff ("FiT") program. This may involve the entry into a joint venture agreement and/or the setting up of a joint venture company with other parties. In 2011, the Malaysian Government passed the Renewable Energy Bill (creating the FiT policy) and the Sustainable Energy Development Authority bill that resulted to the implementation of the FiT system which obliges distribution licensees (such as Tenaga Nasional Berhad, Sabah Electricity Sdn Bhd and Nur Distribution Sdn Bhd) to buy from the feed-in approval holders the electricity over a long-term period with guaranteed pricing.
The Group is of the view that the investment in solar power plant is a good business opportunity in the long term as the Group will be able to sell the renewable electricity produced to the distribution licensees at above market rates through the FiT system over the period. To set up a solar power plant, the costs may include the purchase of land, installation and commissioning of a solar panel plant. The Group may procure the services of a solar photovoltaic system installer for the setting up and installation of solar system plant.
In the event the Group fails to identify any suitable business investments within eighteen (18) months from the date of listing of the Placement Shares, the proceeds will be utilised for the Group's general working capital requirements such as payment to suppliers, marketing, administration and operating expenses. At this juncture, the Group is unable to provide the breakdown of such utilisation. Pending the full utilisation of the proceeds for investments in new businesses, the Company intends to place the proceeds (including accrued interest, if any) or the balance thereof in interest-bearing deposit account(s) or in short-term money market instruments with licensed financial institution(s).
(2) Details of the working capital for the PUC Group's are as follows:
RM'000 | |
Payment of trade and other creditors(a) | 2,500 |
Payment of staff cost and administrative expenses (b) | 1,500 |
Total | 4,000 |
Notes:
(a) Comprise payment to trade and other creditors for existing and future trade purchases and on-going costs.
(b) Comprise the Group's day-to-day operating expenses to support its existing on-going business operations which shall include, but not limited to the payment of salaries to staff and other staff related costs as well as administrative expenses.
(3) The estimated expenses consist of professional fees and fees payable to the relevant authorities. Any variation in the actual amount of the expenses for the Proposals will be adjusted proportionately to/from the funds earmarked for item (ii) above.
2.2 Details of the Proposed Bonus Issue of Shares
2.2.1 Basis and number of Bonus Shares to be issued
The Proposed Bonus Issue of Shares will entail the issuance of up to 132,791,321 Bonus Shares to be credited as fully paid-up on the basis of one (1) Bonus Share for every seven (7) existing PUC Shares held by the shareholders of PUC whose names appear in the Record of Depositors of the Company as at the close of business on the Entitlement Date ("Entitled Shareholders").
For illustrative purposes only, the maximum number of 132,791,321 Bonus Shares was arrived at after taking into account the existing issued and paid-up share capital of PUC as at the LPD and assuming a total of 84,503,000 Placement Shares (representing approximately ten percent (10%) of the existing issued and paid-up share capital of the Company) were placed out pursuant to the Proposed Private Placement prior to the Entitlement Date. Nonetheless, the actual number of the Bonus Shares to be provisionally allotted to the entitled shareholders would depend on the issued and paid-up share capital of the Company on the Entitlement Date.
Fractional entitlements arising from the Proposed Bonus Issue of Shares shall be disregarded and dealt with by the Board in such manner at its absolute discretion as it may deem fit or expedient and in the best interest of the Company.
The Proposed Bonus Issue of Shares is not intended to be implemented in stages over a period of time.
2.2.2 Capitalisation of reserves
The Proposed Bonus Issue of Shares shall be wholly capitalised from the share premium account of the Company.
According to Rule 6.31(1) of the ACE Market Listing Requirements of Bursa Securities ("Listing Requirements"), a listed corporation intending to make a bonus issue of securities must ensure the necessary reserves required for capitalisation of the bonus issue is unimpaired by losses on a consolidated basis, where applicable, based on the listed corporation's latest audited financial statements as well as its latest quarterly report.
Based on the Company's latest audited financial statements for the FYE 31 December 2013 and the latest unaudited quarterly results for the three (3)-month financial period ended 31 March 2014, the reserves are as follows:
Audited as at 31 December 2013 | Unaudited as at 31 March 2014 | |||
Group | Company | Group | Company | |
RM | RM | RM | RM | |
Share premium | 18,832,755 | 18,832,755 | 15,000,000 | 18,832,755 |
Preference Shares | - | - | 2,794,596 | - |
Exchange fluctuation reserve | (1,849) | - | (1,060,629) | - |
Reserve on Acquisition | - | - | (36,809,064) | - |
Other reserve | - | - | 1,350,044 | - |
(Accumulated losses) / Retained profits | (506,002) | (2,839,140) | 40,732,708 | (3,085,122) |
Total reserves | 18,324,904 | 15,993,615 | 22,007,655 | 15,747,633 |
The illustration of the proposed capitalisation of reserves for the Proposed Bonus Issue of Shares based on the Company's latest audited financial statements as at 31 December 2013 is set out below:
PUC (Company level) | ||||
Share premium* | Accumulated losses | Total reserves | ||
RM | RM | RM | ||
Audited as at 31 December 2013 | 18,832,755 | (2,839,140) | 15,993,615 | |
Less: | Amount to be capitalised pursuant to the Proposed Bonus Issue of Shares (up to 132,791,321 Bonus Shares) | (13,279,132) | - | (13,279,132) |
Less: | Estimated expenses | (300,000) | - | (300,000) |
After the Proposed Bonus Issue of Shares | 5,253,623 | (2,839,140) | 2,414,483 | |
Note:
* The share premium arising from the Proposed Private Placement is not included for the illustration as it will not be capitalised for the Proposed Bonus Issue of Shares.
The illustration of the proposed capitalisation of reserves for the Proposed Bonus Issue of Shares based on the Company's latest unaudited financial results as at 31 March 2014 is set out below:
PUC (Company level) | ||||
Share premium* | Accumulated losses | Total reserves | ||
RM | RM | RM | ||
Unaudited as at 31 March 2014 | 18,832,755 | (3,085,122) | 15,747,633 | |
Less: | Amount to be capitalised pursuant to the Proposed Bonus Issue of Shares (up to 132,791,321 Bonus Shares) | (13,279,132) | - | (13,279,132) |
Less: | Estimated expenses | (300,000) | - | (300,000) |
After the Proposed Bonus Issue of Shares | 5,253,623 | (3,085,122) | 2,168,501 | |
Note:
* The share premium arising from the Proposed Private Placement is not included for the illustration as it will not be capitalised for the Proposed Bonus Issue of Shares.
The Board confirms that the reserves available to be capitalised for the Proposed Bonus Issue of Shares are unimpaired by losses on a consolidated basis, based on PUC's audited consolidated financial statements as at 31 December 2013 and the latest unaudited consolidated financial results as at 31 March 2014. Hence, PUC has complied with Rule 6.31(1) of the Listing Requirements.
2.2.3 Ranking of the Bonus Shares
The Bonus Shares shall, upon allotment and issuance, rank pari passu in all respects with the then existing PUC Shares, save and except that the Bonus Shares shall not be entitled to any dividends, rights, allotments and/or other distributions that may be declared, made or paid to shareholders, the entitlement date of which is prior to the date of allotment of the Bonus Shares.
2.2.4 Listing of and quotation for the Bonus Shares
An application will be made for the listing of and quotation for the Bonus Shares on the ACE Market of Bursa Securities. The Bonus Shares shall be listed and quoted on the ACE Market of Bursa Securities concurrently with the Warrants pursuant to the Proposed Free Warrants Issue.
2.3 Details of the Proposed Free Warrants Issue
2.3.1 Basis and number of Warrants to be issued
The Proposed Free Warrants Issue involves the issuance of up to 132,791,321 Warrants on the basis of one (1) Warrant for every seven (7) existing PUC Shares held by the Entitled Shareholders at the same Entitlement Date as the Proposed Bonus Issue of Shares.
The Bonus Shares are not entitled to the Warrants.
For illustrative purposes only, the maximum number of 132,791,321 Warrants was arrived at after taking into account the existing issued and paid-up share capital of PUC as at the LPD and assuming a total of 84,503,000 Placement Shares (representing approximately ten percent (10%) of the existing issued and paid-up share capital of the Company) were placed out pursuant to the Proposed Private Placement prior to the Entitlement Date. Nonetheless, the actual number of the Warrants to be provisionally allotted to the Entitled Shareholders would depend on the issued and paid-up share capital of the Company on the Entitlement Date.
Fractional entitlements arising from the Proposed Free Warrants Issue shall be disregarded and dealt with by the Board in such manner at its absolute discretion as it may deem fit or expedient and in the best interest of the Company.
The Proposed Free Warrants Issue will not be implemented in stages over a period of time.
2.3.2 Basis of determining the issue price and exercise price of the Warrants
The Warrants will be issued at no cost to the shareholders of PUC.
The Board has fixed the exercise price of the Warrants at RM0.10 per Warrant, being the par value of PUC of RM0.10 each.
For information purpose only, the exercise price of RM0.10 per Warrant represents a discount of RM0.0784 or 43.95% to the theoretical ex-bonus price of RM0.1784, calculated based on the 5D-VWAP of PUC Shares up to and including the LPD of RM0.2039. The exercise price of the Warrants is fixed at the par value of PUC Shares and at a discount to the ex-bonus price is to provide an incentive to the existing shareholders who will be receiving the Warrants to exercise the Warrant and to increase their equity in the Company during the tenure of the Warrants.
2.3.3 Ranking of the new PUC Shares arising from the exercise of the Warrants
The holders of the Warrants will not be entitled to any voting right or participation in any form of distribution and/or offer of further securities in PUC until and unless such holders of the Warrants exercise their Warrants to subscribe for new PUC Shares and are allotted the new PUC Shares.
The new PUC Shares, arising from the exercise of the Warrants shall, upon allotment and issuance, rank pari passu in all respects with the then existing PUC Shares, except that they shall not be entitled to any dividends, rights, allotments and/or other distributions that may be declared, made or paid where the entitlement date precedes the relevant date of allotment and issuance of the new PUC Shares.
2.3.4 Listing of and quotation for the Warrants and new PUC Shares arising from the exercise of the Warrants
An application will be made to Bursa Securities for the admission of the Warrants to the Official List of Bursa Securities as well as for the listing of and quotation for the Warrants and new PUC Shares to be issued pursuant to the exercise of the Warrants on the ACE Market of Bursa Securities. The Warrants shall be listed and quoted on the ACE Market of Bursa Securities concurrently with the Bonus Shares pursuant to the Proposed Bonus Issue of Shares.
2.3.5 Indicative salient terms of the Warrants
The indicative salient terms of the Warrants are set out as follows:
Terms | Details | |
Issue size | : | Up to 132,791,321 Warrants. |
Form and denomination | : | The Warrants which are free will be issued, registered and in the form of definitive warrant certificates and will be constituted by a deed poll to be executed by the Company ("Deed Poll"). |
Exercise Price | : | The exercise price of the Warrants has been fixed by the Board at RM0.10 each. |
Exercise Rights | : | Each Warrant entitles the Warrant holder to subscribe for one (1) new PUC Share at any time during the Exercise Period at the Exercise Price (subject to adjustments in accordance with the provisions of the Deed Poll). |
Exercise Period | : | The period commencing on, and including the first date of issue date of the Warrants and ending at the close of business at 5.00pm in Malaysia on the date which is ten (10) years from the date of issue of the Warrants if such date is not a market day, then it shall be the market day immediately preceding the said non market day, but excluding those days during that period on which the Record of Depositors and/or the warrants register is or are closed.
Warrants not exercised during the exercise period will thereafter lapse and cease to be valid. |
Mode of exercise | : | A Warrant holder must complete and sign the exercise form (which shall be irrevocable) and deliver the same to the Registrar together with a remittance by way of a banker's draft/ cashier's order/ money order/ or postal order drawn on a bank or post office operating in Malaysia. |
Modification of rights of the Warrants holders | : | The Company may, from time to time, without the consent or sanction of the Warrants holders but subject to the prior approval of Bursa Securities and other relevant authorities and in accordance with the Deed Poll, modify the Deed Poll, if such modification made does not materially prejudice the interests of the Warrant holders or is made to correct a manifest error or to comply with prevailing laws or regulations of Malaysia.
Subject to the approval of any relevant authority, any modification, alteration or abrogation of the covenants or provisions contained in the Deed Poll proposed or agreed to by the Company must be sanctioned by special resolution of the holders of the Warrants, effected by the Deed Poll, executed by the Company and expressed to be supplemental and comply with the requirements of the Deed Poll. |
Board lot | : | For the purposes of trading on Bursa Securities, a board lot for the Warrants shall be one hundred (100) Warrants or as varied from time to time by any relevant authorities carrying the right to subscribe for one hundred (100) Shares. |
Adjustments in the Exercise Price and/or number of the Warrants | : | Subject to the provisions of the Deed Poll, the Exercise Price and/or number of Warrants shall from time to time be adjusted, calculated or determined by the Board in consultation with an approved adviser appointed by the Company and certified by the auditors of the Company in accordance with the Deed Poll in the event of alteration to the share capital of the Company. |
Rights of the Warrants holders | : | The Warrant holders are not entitled to any voting rights in any general meeting of the Company or to participate in any form of distribution and/or offer of securities in the Company until and unless such Warrant holders exercise their Warrants into new PUC Shares. |
Rights in the event of winding-up, liquidation, compromise and/or arrangement | : | If a resolution is passed for a members' voluntary winding up of the Company or where there is a compromise or scheme of arrangement, whether or not for the purpose of or in connection with a scheme for the reconstruction of the Company or the amalgamation of the Company with one or more companies, then:-
(i) for the purposes of such winding-up, compromise or scheme of arrangement to which the Warrant holders, or some persons designated by them for such purposes by a special resolution shall be a party, the terms of such winding up, compromise or scheme of arrangement shall be binding on all the Warrant holders; and
|
(ii) every Warrant holder shall be entitled upon and subject to the conditions at any time within six (6) weeks after the passing of such resolution for a members' voluntary winding up of our Company or within six (6) weeks after the granting of the court order approving the compromise or scheme of arrangement, by the irrevocable surrender of his Warrants to the Company to elect to be treated as if the warrant holder had immediately prior to the commencement of the winding up, compromise or scheme of arrangement exercised the Exercise Rights represented by such Warrants to the extent specified in the exercise form and be entitled to receive out of the assets of the Company which would be available in liquidation as if he had on such date been the holder of the Shares to which he would have become entitled pursuant to such exercise and the liquidator of the Company shall give effect to such election accordingly. Upon the expiry of the above six (6) weeks, all exercise rights of the Warrants shall lapse and cease to be valid for any purpose. | ||
Listing status | : | The Warrants will be listed and traded on the ACE Market of Bursa Securities. An application will be made for the admission of the Warrants to the Official List of the ACE Market of Bursa Securities as well as for the listing of and quotation for the Warrants and the new PUC Shares to be issued pursuant to the exercise of the Warrants on the ACE Market of Bursa Securities. |
Governing law | : | The laws of Malaysia. |
2.3.6 Utilisation of proceeds
The Proposed Free Warrants Issue is not expected to raise any funds as the Warrants will be issued at no cost to the shareholders of PUC. However, as and when the Warrants are exercised, the exact quantum of proceeds that may be raised by PUC will depend upon the actual number of Warrants exercised during the tenure of the Warrants. As such, the exact timeframe and the breakdown for the utilisation of the proceeds is not determinable at this juncture.
For illustration purposes only, assuming the full exercise of 132,791,321 Warrants at the Exercise Price of RM0.10, the proceeds to be raised by the Company is approximately RM13.28 million. Such proceeds are intended to be utilised for the working capital and/or the capital expenditure of the PUC Group as and when the need arises.
The working capital of the PUC Group include, amongst others, payment to suppliers, marketing, administration and operating expenses.
3. RATIONALE FOR THE PROPOSALS
3.1 Proposed Private Placement
After due consideration of the various methods of fund raising, the Board is of the opinion that the Proposed Private Placement is the most appropriate avenue of fund raising at this juncture as it enables the Company to raise funds expeditiously for investment in new businesses and working capital requirements as disclosed in Section 2.1.6 of this announcement without incurring additional finance cost as compared to bank borrowings. In addition, the Proposed Private Placement will further strengthen the capital base of the Company.
3.2 Proposed Bonus Issue of Shares
After due consideration, the Board is of the view that the Proposed Bonus Issue of Shares is an appropriate avenue of rewarding the existing shareholders of the Company as the Proposed Bonus Issue of Shares will:
(i) reward the existing shareholders of the Company for their continuing support;
(ii) increase the number of PUC Shares held by the Company's existing shareholders, whilst maintaining their percentage of equity interest; and
(iii) improve the trading liquidity of PUC Shares on Bursa Securities via a greater participation of investors with the increase in the number of shares.
3.3 Proposed Free Warrants Issue
After due consideration, the Board is of the view that the Proposed Free Warrants Issue is an appropriate avenue of rewarding the existing shareholders as the Proposed Free Warrants Issue will:
(i) reward the existing shareholders of the Company for their continuing support by enabling them to participate in the convertible securities of the Company which are issued at no cost to the shareholders and are tradable on Bursa Securities;
(ii) help to strengthen the Group's capital base and shareholders' funds as well as potentially provide funds for the Group to finance its working capital and/or capital expenditure requirements, as and when the Warrants are exercised without incurring interest cost, as compared to bank borrowings;
(iii) provide the existing shareholders of the Company with an opportunity to increase their equity in the Company at a predetermined price during the tenure of the Warrants; and
(iv) allow the existing shareholders of the Company to further participate in the future prospects and growth of the Group and/or any potential capital appreciation in the Warrants and PUC Shares, as and when the Warrants are exercised.
4. EFFECTS OF THE PROPOSALS
For illustration purpose, the pro-forma effects of the Proposals on the share capital, net assets attributable to ordinary equity holders of PUC ("NA"), gearing, earnings, earnings per Share ("EPS") and substantial shareholders' shareholdings of PUC are set out below:
4.1 Issued and paid-up share capital
The pro-forma effects of the Proposals on the issued and paid-up share capital of PUC are as follows:
No. of PUC Shares | RM | |
Issued and paid-up share capital as at the LPD | 845,036,250 | 84,503,625 |
To be issued pursuant to the Proposed Private Placement | 84,503,000 | 8,450,300 |
After the Proposed Private Placement | 929,539,250 | 92,953,925 |
To be issued pursuant to the Proposed Bonus Issue of Shares | 132,791,321 | 13,279,132 |
After the Proposed Bonus Issue of Shares | 1,062,330,571 | 106,233,057 |
Shares to be issued assuming full exercise of the Warrants pursuant to the Proposed Free Warrants Issue* | 132,791,321 | 13,279,132 |
Enlarged issued and paid-up share capital | 1,195,121,892 | 119,512,189 |
Note:
* The Proposed Free Warrants Issue will not have any effect on the issued and paid up share capital of the Company until the Warrants are exercised.
4.2 Earnings and EPS
The Proposed Private Placement is not expected to have a material effect on the earnings of the PUC Group for the financial year ending 31 December 2014 as the proceeds to be raised are expected to be utilised within 18months from the date of listing of the Placement Shares. However, it is expected to contribute positively to the future earnings of the Group when the benefits of the utilisation of proceeds are realised.
The Proposed Bonus Issue of Shares and Proposed Free Warrants Issue are not expected to have any material effect on the earnings of the PUC Group for the financial year ending 31 December 2014. However, there will be a corresponding dilution in PUC's consolidated EPS as a result of the increase in the number of Shares in issue pursuant to the issuance of the Placement Shares, Bonus Shares and the exercise of Warrants.
The Proposed Free Warrants Issue is not expected to have an immediate material effect on the consolidated earnings and EPS until such time when the Warrants are exercised. The potential effect of the exercise of the Warrants on the future consolidated earnings and EPS of PUC will depend upon, amongst others, the number of the Warrants exercised at any point in time and utilisation of proceeds arising from the exercise of the Warrants.
4.3 NA and gearing
Based on the audited consolidated financial statements of PUC as at 31 December 2013, and on the assumption that the Proposals had been effected as at the date, the pro-forma effects of the Proposals on the consolidated NA and gearing of PUC are as follows:
(Audited) | (I) | (II) | (III) | (IV) | |
As at31 December 2013 (RM) |
After Proposed Private Placement (RM) | After (I) and Proposed Bonus Issue of Shares (RM) | After (II) and Proposed Free Warrants Issue (RM) | After (II) and assuming full exercise of the Warrants (RM) | |
Share capital | 84,503,625 | 92,953,925 | 106,233,057 | 106,233,057 | 119,512,189 |
Reserves | 18,324,904 | 25,207,659(1) | 11,928,527 | 11,928,527 | 11,928,527(2) |
Shareholders' funds / NA | 102,828,529 | 118,161,584 | 118,161,584 | 118,161,584 | 131,440,716 |
No. of PUC Shares in issue | 845,036,250 | 929,539,250 | 1,062,330,571 | 1,062,330,571 | 1,195,121,893 |
NA per PUC Share (RM) | 0.12 | 0.13 | 0.11 | 0.11 | 0.11 |
Total borrowings | - | - | - | - | - |
Gearing (times) | - | - | - | - | - |
Notes:
(1) After adding share premium of RM7,182,755 based on 84,503,000 Placement Shares at an indicative issue price of RM0.185 for each Placement Share and deducting estimated expenses of RM300,000 for the Proposals.
(2) Based on the exercise price of RM0.10.
4.4 Substantial shareholders' shareholdings
The pro-forma effects of the Proposals on the direct and indirect shareholdings of the substantial shareholders of PUC as at 27 June 2014 are as follows:
fdfd | As at 27 June 2014 |
(I)After the Proposed Private Placement | ||||||
Direct | Indirect | Direct | Indirect | |||||
Name | No. of PUC Shares | % | No. of PUC Shares | % | No. of PUC Shares | % | No. of PUC Shares | % |
RedHot Media International Limited | 527,939,106 | 62.48 | - | - | 527,939,106 | 56.80 | - | - |
Resource Holding Management Limited(1) | - | - | 527,939,106 | 62.48 | - | - | 527,939,106 | 56.80 |
Cheong Chia Chieh @ Chang Chia Chieh(2) | - | - | 527,939,106 | 62.48 | - | - | 527,939,106 | 56.80 |
Placee(s) | - | - | - | - | 84,503,000 | 9.09 | - | - |
fdfd |
(II)After (I) and the Proposed Bonus Issue of Shares(3) |
(III)After (II) and assuming full exercise of the Warrants | ||||||
Direct | Indirect | Direct | Indirect | |||||
Name | No. of PUC Shares | % | No. of PUC Shares | % | No. of PUC Shares | % | No. of PUC Shares | % |
RedHot Media International Limited | 603,358,978 | 56.80 | - | - | 678,778,851 | 56.80 | - | - |
Resource Holding Management Limited(1) | - | - | 603,358,978 | 56.80 | - | - | 678,778,851 | 56.80 |
Cheong Chia Chieh @ Chang Chia Chieh(2) | - | - | 603,358,978 | 56.80 | - | - | 678,778,851 | 56.80 |
Placee(s) | 96,574,857 | 9.09 | - | - | 108,646,714 | 9.09 | - | - |
Notes:
(1) Deemed interested by virtue of it being the holding company of RedHot Media International Limited.
(2) Deemed interested by virtue of him having substantial interest in Resource Holding Management Limited.
(3) The Proposed Free Warrants Issue will not have any effect on the substantial shareholders' shareholdings until the Warrants are exercised.
4.5 Convertible securities
As at the LPD, the Company does not have any outstanding convertible securities.
5. APPROVALS REQUIRED
The Proposals are subject to and conditional upon the following approvals being obtained:
(i) Bursa Securities for the following:
(a) listing of and quotation for the Placement Shares to be issued pursuant to the Proposed Private Placement;
(b) listing of and quotation for the Bonus Shares to be issued pursuant to the Proposed Bonus Issue of Shares;
(c) admission and listing of and quotation for the Warrants to the Official List of the ACE Market of Bursa Securities; and
(d) listing of and quotation for the new PUC Shares to be issued pursuant to the exercise of the Warrants,
(ii) the shareholders of PUC at an extraordinary general meeting to be convened for the Proposed Bonus Issue of Shares and Proposed Free Warrants Issue; and
(iii) any other relevant authorities, if required.
The Company had obtained the approval of its shareholders at the last annual general meeting ("AGM") convened on 12 June 2014 pursuant to Section 132D of the Companies Act, 1965 that empowers the Directors of the Company to issue and allot new PUC Shares, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of PUC Shares issued does not exceed ten percent (10%) of the issued and paid-up share capital of the Company for the time being and that the approval shall continue in force until the conclusion of the next AGM of the Company or the expiration of the period within which the next AGM is required by law to be held or revoked/varied by resolution passed by the shareholders in general meeting whichever is the earlier.
6. INTER-CONDITIONALITY OF THE PROPOSALS
The Proposed Private Placement, Proposed Bonus Issue of Shares and the Proposed Free Warrants Issue are not inter-conditional upon each other.
The Proposals are not conditional upon any other corporate proposals undertaken or to be undertaken by PUC.
7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM
None of the Directors and/or major shareholders of PUC and/or persons connected with them have any interest, either direct or indirect, in the Proposals save for their respective entitlements as shareholders of PUC under the Proposed Bonus Issue of Shares and the Proposed Free Warrants Issue, the rights of which are also available to all other Entitled Shareholders of the Company on the Entitlement Date.
8. DIRECTORS' STATEMENT
The Board, after having considered all aspects of the Proposals including its rationale and effects, is of the opinion that the Proposals are in the best interest of the Company.
9. ADVISER
TA Securities has been appointed as the Adviser in relation to the Proposals and Placement Agent in relation to the Proposed Private Placement.
10. ESTIMATED TIME FRAME FOR COMPLETION
Barring any unforeseen circumstances and subject to the approvals of the relevant authorities being obtained, the Board expects the Proposals to be completed in the second (2nd) half of 2014.
11. APPLICATIONS TO THE RELEVANT AUTHORITIES
Applications to the relevant authorities in respect of the Proposals are expected to be submitted within one (1) month from the date of this announcement.
This announcement is dated 10 July 2014.