KUALA LUMPUR (June 16): Metronic Global Bhd is planning to consolidate every three ordinary shares in the company into one share (3-into-1), followed by a rights issue with free warrants, that could raise as much as RM32.27 million.
The bulk of the funding it plans to raise is for Phase 1 of its mixed housing development in Kuala Kerai, Kelantan, with the remainder to be used for current and future engineering projects, said Metronic in a Bursa Malaysia filing yesterday.
Metronic said the share consolidation exercise is part of its proactive capital management to improve the group's capital structure, with the company to benefit from the easier management of a smaller number of shares.
As at May 18, Metronic's issued share capital comprised 949.44 million shares, which would be reduced to 316.48 million shares on completion of the proposed share consolidation, if no options under its existing ESOS are granted and exercised into new shares prior to the exercise.
Following that, the group intends to implement the proposed renounceable rights issue with warrants on the basis of four renounceable rights shares and three free warrants for every two existing shares held, at an issue price to be fixed later.
The rights issue will involve the issuance of up to 645.34 million rights shares and up to 484.01 million free warrants. Metronic said it intends to raise at least RM6 million, or as much as RM32.27 million from the corporate exercise, based on a minimum subscription level of 120 million shares and 90 million warrants, on the assumption of an issue price of 5 sen apiece.
It intends to use at least RM6 million or up to RM22.4 million from the rights issue proceeds to fund Phase 1 Kuala Kerai project, which has an estimated gross development cost of RM29.2 million, and an estimated gross development value of RM34.3 million.
It has also yet to fix the warrant exercise price, but at an indicative price of also 5 sen a share, it could get as much as RM24.2 million more upon full exercise of the warrants.
Subject to relevant approvals being obtained, Metronic expects all the proposals to be completed by the fourth quarter of this year.
Metronic shares closed unchanged at 6.5 sen yesterday, which valued the group at RM61.7 million. Year to date, the counter has slid nearly 24%. — theedgemarkets.com
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