Instacom proposes rights issue to raise proceeds

PETALING JAYA: Instacom Group Bhd has proposed a renounceable rights issue together with free warrants to raise proceeds of up to RM42.95 million.
The end-to-end solutions provider for the country's telecommunications industry said yesterday it proposed to increase the authorised share capital from RM200 million comprising of 2 billion shares to RM500 million comprising of 5 billion shares and undertake a renounceable rights issue of up to 429.5 million new 10 sen ordinary shares together with up to 214.7 million free detachable warrants on the basis of two rights share for every seven shares and one free warrant for every two rights share subscribed.
The issue price for the rights share shall be determined later but will not be lower than the par value of Instacom shares of RM0.10 each.
Instacom said of the RM42.95 million proceeds, it will use RM15 million for future viable investments, up to RM26 million and RM1.05 million to repay borrowings and as general working capital respectively, and the remaining RM9 million as estimated expenses for the exercise.
Apart from expanding Instacom Group's business organically, Instacom said the group's future plans also includes expanding inorganically, via mergers and acquisitions of businesses or investments within 24 months from completion of the exercise.
It is yet identify any other suitable and viable business or investment opportunities for consideration.
It added that part of the proceeds may also be used to fund the potential acquisition of additional equity interest in Neata Aluminium (Malaysia) Sdn Bhd (Neata) in the future. Instacom completed the acquisition of the 35% stake in Neata on Jan 30, 2015.