RHM.L Regulatory News (RHM)

12 October 2015

Resource Holding Management Limited

("RHM" or the "Company")

Update Regarding PUCF Rights Issue and Suspension

Further to the announcement by the Company 10 August 2015, the Board of RHM (AIM:RHM) wishes to provide the following update.

PUCF Rights Issue

PUC Founder (MSC) Berhad ("PUCF") had announced its intention on 4 August 2015 to raise up to RM 127.6 million (equivalent to approximately GBP 20.0 million*) through a renounceable rights issue to existing shareholders of PUCF (the "PUCF Rights Issue").

PUCF has today released an announcement on a revision to the basis of the entitlement of the PUCF Rights Issue as follows:-

(i) Rights ICULS, from two (2) ICULS for every one (1) PUCF Share to twenty eight (28) ICULS for every twenty (20) PUCF Shares; and

(ii) Warrants-B, from one (1) Warrant-B for every eight (8) ICULS subscribed to seven (7) Warrants-B for every twenty eight (28) ICULS subscribed.

PUCF has also included in its announcement today, the revision of the maximum amount of funds intended to be raised from RM127.6 million to RM83.9 million (equivalent to approximately GBP 13.17 million*) through its renounceable rights issue to existing shareholders of PUCF (the "Revised PUCF Rights Issue"), which is described in more detail further below.

RHM's wholly-owned subsidiary, RedHot Media International Limited ("RMIL"), currently holds 443,168,402 ordinary shares in PUCF, which represents 41.58% of PUCF's issued share capital, as well as 36,215,840 warrants to subscribe for new PUCF shares.

The proposed Revised PUCF Rights Issue is expected to be effected by PUCF through the issuance of three year, 4% irredeemable convertible unsecured loan stock ("Rights ICULS") at 100% of the nominal value of RM0.05 each, on the basis of two RM0.05 nominal value of the Rights ICULS for every one existing PUCF share held by the entitled shareholders of PUCF on an entitlement date to be determined later, together with up to 419,507,384 free new detachable warrants ("Warrant(s) B") on the basis of one Warrant-B for every seven Rights ICULS subscribed. It is anticipated that the Rights ICULS and the Warrants-B will be traded on the ACE Market of Bursa Malaysia Securities Berhad.

The Revised PUCF Rights Issue is now subject to a minimum level of funds required to be raised by PUCF of RM 28 million (equivalent to approximately GBP 4.40 million*) (the "Revised Minimum Fundraise"). The previous minimum level of funds required to be raised was RM 40 million (equivalent to approximately GBP 6.28 million*).

The terms of the Revised PUCF Rights Issue, which entails a higher number of free Warrants-B attached with the Rights ICULS, was agreed by PUCF after taking into consideration current market conditions. As a result of the recent market sentiment, the market price of PUCF Shares on the ACE Market of Bursa Securities has also been volatile.

Pursuant to the Revised Minimum Fundraise, RMIL has rescinded its former undertaking of RM 40 million (equivalent to approximately GBP 6.28 million*) and provided PUCF with a revised, binding irrevocable undertaking to subscribe for RM 28 million in the PUCF Rights Issue (equivalent to approximately GBP 4.40 million*). RMIL has reserved its right to subscribe, sell, trade, or renounce the remaining number of its Rights ICULS entitlement. Save for the reduced subscription amount in the PUCF Rights Issue the form of the irrevocable undertaking entered into by RMIL remains unchanged.

In the event that RMIL fails to fulfil its obligations under the Irrevocable Undertaking and the Minimum Fundraise is not achieved, then PUCF will not proceed with the implementation of the proposed PUCF Rights Issue.

The Proposed PUCF Rights Issue is subject to, inter alia, regulatory approvals in Malaysia, both from Bursa Securities and the Securities Commission, and approval by shareholders of PUCF. It is estimated by PUCF that the relevant applications to the regulatory authorities in Malaysia will be made within two months. The estimated timeframe for PUCF obtaining both regulatory and shareholder approval is by Q1 2016.

In 2015, PUCF has made announcements regarding business developments in the renewable energy industry. This included MaxGreen Energy Sdn. Bhd. ("MESB"), a wholly-owned subsidiary of PUCF, entering into a renewable energy power purchase agreement with Tenaga Nasional Berhad ("TNB"), under which MESB is to supply and deliver solar photovoltaic renewable energy to TNB for a Feed-in Tariff concession period of 21 years. PUCF anticipates that the construction of a 1 MW solar photovoltaic plant should commence in the third quarter of 2015 and is scheduled to be in operation by the fourth quarter of 2015.

A copy of the announcement made earlier today by PUCF can be found here:

http://www.bursamalaysia.com/market/listed-companies/company-announcements/4891881

Proposed Diversification of PUCF's business

In recent announcements released by PUCF it has been highlighted that the existing business of PUCF and its subsidiaries would be diversified, to include the provision of energy utility services. The net funds raised under the PUCF Rights Issue are intended be used for the capital expenditure associated with the construction of solar photovoltaic plants and for working capital purposes.

In recent announcements released by PUCF it has also been highlighted that the management of PUCF believes that the renewable energy business will not only bring positive growth but at the same time offer long term recurrent income streams to the PUCF group during the concession periods.

PUCF's recent announcements also state that, upon the completion of the proposed diversification, the PUCF group's existing business (as described above) would remain and continue as the core business of the PUCF group, while the provision of energy utility services is expected to become one of the PUCF group's future core businesses.

RHM's Irrevocable Undertaking, Reverse Takeover and Suspension of Trading

As announced on 10 August 2015, in order to finance the commitment given pursuant to the Irrevocable Undertaking, RMIL has agreed to a letter of offer for a conditional margin trading facility of RM 40 million with a Malaysian based financial institution (the "Facility"). The availability of the Facility to RMIL is conditional on, amongst other things, the completion of all required documentation and the deposit of the agreed collateral. The letter of offer for the Facility remains in place for the Revised PUCF Rights Issue. Further details on the Facility will be announced by RHM at the appropriate time.

By reason of the size of the Irrevocable Undertaking in relation to RHM, the entering into of the Irrevocable Undertaking by RHM is classified as a reverse takeover under the AIM Rules for Companies. The AIM Rules for Companies require that completion of RHM's participation in the PUCF Rights Issue is, amongst other things, conditional upon and subject to the approval of the Company's shareholders, which will be sought at a general meeting of the Company, and on the publication of an AIM admission document.

Trading in RHM's shares were suspended on 4 August 2015 and will remain suspended from trading on AIM pending the publication of the AIM admission document and the notice of general meeting seeking shareholder approval, or an announcement is made that the PUCF Rights Issue is not proceeding.

Information on PUCF

The PUCF group is predominantly involved in advertising, media brokerage and consultancy, fingerprint verification products, information technology solutions provider of electronic publishing system and financial services. In line with the efforts to enhance its revenue and profitability, the Group has been identifying potential new business opportunities to diversify into.

PUCF's audited results for the year ended 31 December 2014 recorded revenue of approximately RM 53.4m (2013: approximately RM 49.1m) and a pre-tax profit of approximately RM 10.1m (2013: approximately RM 10.9m). PUCF's unaudited results for the first half ended 30 June 2015 recorded revenue of approximately RM 15.9m (H1 2014: approximately RM 28.3m) and a pre-tax profit of approximately RM 1.6m (H1 2014: approximately RM 4.9m).

Further financial information regarding PUCF can be found here:

http://www.bursamalaysia.com/market/listed-companies/company-announcements/4740533

http://www.bursamalaysia.com/market/listed-companies/company-announcements/4851165 

RHM will make further announcements as appropriate.

For further information please contact:

*Based on today's prevailing exchange rate of RM6.37:GBP 1