KUALA LUMPUR: WCT Bhd has proposed to issue RM600 million nominal value of serial fixed rate bonds of up to five years with up to 181.08 million detachable warrants on a bought-deal basis to primary subscribers, it said on Wednesday, July 28.
The proposed issue will also entail a proposed offer for sale of the provisional rights to allotment of up to 181.08 million WCT warrants by the primary subscribers at an offer price to be determined later.
The corporate exercise will also involve the issuance of up to 121.08 million warrants to the shareholders of WCT on a renounceable basis of one WCT warrant for every eight existing ordinary shares, and 60 million warrants to entitled senior management of the WCT group.
The funds raised from the proposed bonds with warrants will be used to refinance its existing borrowings with higher borrowing costs, resulting in savings; to lock in financing at a lower effective funding cost, allowing the group to better plan its cashflow requirements; and upon exercise of the warrants, the group will obtain additional proceeds to redeem the bonds, finance its working capital requirements in the future and/or repay its borrowings, in addition to strengthening its capital base.
From the proceeds raised, WCT has allocated up to RM350 million to repay its existing borrowings.
Meanwhile, about RM247.3 million has been allocated for working capital and general funding requirements, subject to variations in the proposal expenses.
The remainder will be used to defray the proposal expenses.
“On the other hand, the proposed offer for sale to shareholders will provide the shareholders of WCT with an option to further increase their equity participation in the Company at a pre-determined price during the exercise period of the WCT warrants,” it said.
Meanwhile, the proposed offer for sale to senior management will provide them with an opportunity to participate in the long-term growth of the group as well as reward them for their contributions, dedication and loyalty, it added.
“This would further motivate them to continue to participate actively in the operations of the WCT group and further encourage them to contribute to the future growth of the WCT group,” it said.
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