Published: Thursday September 20, 2012 MYT 4:34:00 PM
KNM expects rights issue to be completed by November
KUALA LUMPUR: KNM Group Bhd expects its proposed renounceable rights issue of 488.92 million new shares to be completed by November.
Its group's executive chairman/ CEO Lee Swee Eng said on Thursday the proceeds from the rights issue would be used to "pare down our current borrowings and for other working capital requirements".
In a statement issued after the EGM, he said the shareholders had approved the rights issue of 488.92 million new shares at an indicative issue price of RM1 each.
The indicative price of RM1 will be payable in two calls. The first call of 40 sen will be payable in cash from subscribers, and the second call of 60 sen will be capitalised from KNM's share premium account.
The theoretical ex-rights price is about 60 sen and is 50% above the first call of 40 sen. The rights shares will be issued on the basis of one rights share for every two existing KNM shares with one detachable warrant for every one rights share subscribed for.
Recently, KNM announced plans to list Germany subsidiary, Borsig on the Singapore Stock Exchange. The proposed listing will have an estimated IPO market capitalisation of RM1.8b to RM1.9b indicated by UOB Bank Ltd in the preliminary valuation to the group, which is 15%-20% discount to the current sector average. Lee said this exercise is just the first of many plans to unlock its investment.
"It will further pave the way for capital expenditure and securing bigger projects, and the outlook for the group remains positive. We are steadily on track in turning around our group with major projects proceeding according to plan," Lee said.