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KUALA LUMPUR: Ho Hup Construction Co. Bhd, which has earlier targeted to submit its revised regularisation scheme on Feb 4, has sought a three-month extension to May 4 to address its Practice Note 17 status.
Ho Hup said on Friday, Jan 22 it had submitted an application to Bursa Malaysia Securities for the extension to relook at its proposals to regularise the financial condition.
To recap, on Oct 30, 2009, it had proposed the regularisation plan which included a proposed capital reduction; proposed consolidation; proposed restricted issue; proposed rights issue; and proposed amendments.
Subsequently, it received various feedback from shareholders on the initial plan. It added although the board viewed the initial plan as "sufficiently comprehensive" to uplift Ho Hup’s PN17 status, the Board has deliberated on the concerns and feedback received from its shareholders.
To ensure the successful implementation of the regularisation proposals, the board decided to review the plan and in lieu of certain changes.
It had on Jan 22 submitted an application to Bursa Securities for threee months extension to submit a revised scheme to Bursa Securities.
Among the changes it is looking to the initial plan, the revised proposals may include:
(a) Higher participation by existing shareholders in the rights issue and lower amount of restricted issue shares to investors. In this respect, the following are being contemplated by the board: -
(i) Proposed placement of approximately 10 million new placement shares at RM1 each and a proposed renounceable rights issue of up to 30 million new revised rights shares at RM1 per revised rights share.
"In view of the above changes to the proposed rights Issue, the company is presently re-engaging the major shareholders of the company to procure their interest in subscribing for the revised rights shares," said Ho Hup.
It added it the revised rights shares were not fully subscribed by the shareholders, the balance would be placed out to investors.
Ho Hup shareholders will be given the first right of refusal to subscribe for the revised rights shares before the remaining revised rights shares are then placed out.
The other changes:
(b) Lower capital reduction and introduction of an option to leverage on the company’s current core land bank of 60 acres within Bukit Jalil should the capital reduction proposed be unsuccessful. In this respect, the company is contemplating:
(i) proposed reduction of the paid-up by 60 sen of the par value of each existing share instead of 95 sen of the par value of each existing Share under the initial plan;
Subsequent to the proposed revised capital reduction, a proposed share consolidation of the resultant ordinary shares of 40 sen each, on the basis of five shares of 40 sen each into two shares.
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(ii) should the proposed revised capital reconstruction be unsuccessful, shareholders could vote for the company to leverage on its core landbank (to address the accumulated losses of the Ho Hup Group with certainty.
Ho Hup said it was in discussions with various parties which include disposal of land within the core landbank; arrangements to jointly develop the core landbank; entering into put options to secure buyer(s) for the development projects within the core landbank; or a combination of all of the above.
"The details of the Proposed Revised Scheme are still subject to finalisation as the company is currently still in negotiations with the various parties, in particular the relevant parties for the proposed core land bank transaction," it said.
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