Halex Holdings Bhd has made a move to change its earlier cash call to renounceable two-call rights issue, to raise MYR40 million. The large portion of the funds raised will go into a stake acquisition in a property company.
In April, the agrochemical and disposable healthcare products manufacturer announced a proposed rights issue with free detachable warrants and has seen its share price tumble 15 per cent since.
In a filing with Bursa Malaysia yesterday, Halex said the change was made after considering the prevailing market price of Halex shares. The group closed at MYR0.51 on Thursday, with a market capitalisation of MYR54.05 million.
Halex added that its latest proposal comes with free warrants at an issue price to be determined later.
As for the utilisation of the proceeds, Halex said MYR17.17 million will channeled into the acquisition of a 75 per cent stake in property development company Kensington Development Sdn Bhd, from Bestempire Ltd (Bestempire).
Another MYR6.2 million will be used to settle shareholder’s loan and other liabilities pursuant to the proposed acquisition, some MYR5.57 million will be used for working capital and MYR3.5 million will be funded for the expansion of the business operations of Halex Woolton.
Finally, MYR3 million will be used to acquire office building in Selangor or Wilayah Persekutuan, while the remainder MYR1.65 million will be for estimated expenses related to the corporate exercise.
Halex targets the corporate exercise to be completed by the fourth quarter of 2015.
The first call of the rights issue – payable in cash, on application by an entitled shareholder who wish to subscribe for the rights shares (first call) and the second call, to be capitalised from the share premium and retained earnings of Halex – would be determined later.