KUALA LUMPUR (July 19): Tan Sri Wan Azmi Wan Hamzah and Gelombang Global Sdn Bhd (GGSB), a private vehicle of former Renong Bhd managing director Datuk Mohd Zakhir Siddiqy, have committed to investing RM42 million collectively in ailing Scomi Group Bhd.

The fresh capital will be injected into Scomi by underwriting the proposed rights issue which is fixed at 18 sen per share. Should the cash call be fully subscribed, the two investors will take part in the proposed restricted rights issue, according to the company’s filing with Bursa Malaysia yesterday.

This confirms The Edge Financial Daily’s article on Wednesday entitled “Wan Azmi said to surface as a substantial shareholder of Scomi”.

In the filing, Scomi said Wan Azmi and GGSB have each committed to underwrite RM21 million worth of rights shares each at 18 sen per share, in the event that the exercise is undersubscribed.

The cash call is being priced higher than the market price. Scomi shares were last traded at nine sen, giving it a market capitalisation of RM98.45 million.

However, if the rights issue is oversubscribed or less than RM21 million is required from each party for the exercise, then both Wan Azmi and GGSB are entitled to a restricted rights issue of up to 215.1 million new shares that come with 71.7 million detachable warrants on the basis of three restricted issue shares with one free warrant at 19 sen per share.

“Wan Azmi and GGSB will be providing RM21 million each as a loan to Scomi for their commitment to subscribe for both Wan Azmi and GGSB’s entitlement and excess undertaking.

“The proposed restricted issue will only be implemented in the event that there is insufficient excess rights shares to be allocated to Wan Azmi and GGSB pursuant to their excess undertaking,” it said.

Meanwhile, loans of RM21 million each from Wan Azmi and GGSB will be used to offset against the subscription monies payable by the parties for the rights shares and restricted issue, if applicable.

Besides that, the group has provided an update on the proposed RM38 million liabilities settlement with Malayan Banking Bhd, and said that it will be paying RM23 million in cash, while the balance RM15 million will be settled via the issuance of shares at 18 sen sen per share under its maximum scenario.

On the other hand, if the group only achieves minimum subscription, Scomi shall be required to pay RM20 million in cash, with the remaining RM3 million to be paid over four quarterly instalments of RM750,000 at an interest rate of base lending rate plus 2.5% per annum.

Upon completion of the rights issue and the proposed liabilities settlement, Wan Azmi’s stake in Scomi will increase from 0.75% currently to 5.98% under the maximum scenario, while GGSB’s stake will increase from 0.01% to 5.85%.

Under the minimum scenario, Wan Azmi will hold 16.99% of Scomi shares and GGSB will hold 16.7%.

Scomi had also revised its previously proposed share capital reduction exercise, from the initial reduction from RM224.96 million to RM40 million. Now, the company is looking to reduce its share capital to RM3 million.

This will give rise to total credit of RM221.96 million, which will be credited to its capital reduction reserves, to be used to offset future losses of the company or in such manner to be determined by its board of directors, it said.

The credit amount is higher than the RM184.96 million total credit arising from the previous proposal.

This article first appeared in The Edge Financial Daily, on July 19, 2019.

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