XOX proposes to issue new shares to fund Voopee mobile app expansion

PETALING JAYA: XOX Bhd expects to raise RM40 million from its proposed issuance and allotment of up to 400 million new ordinary shares of 10 sen each, to fund the expansion of its Voopee mobile application.
The move is XOX's second fund raising exercise this year. On Feb 22, 2016, XOX completed a rights issue of shares with warrants exercise, which raised a total of RM40.08 million to fund the company's existing operations.
In a filing with Bursa Malaysia yesterday, XOX said it entered into a conditional subscription agreement with Macquarie Bank Limited in relation to the proposed issuance and allotment new XOX shares.
Under the subscription agreement, Macquarie Bank committed to subscribe to a minimum number of subscription shares of at least 12% of the volume of XOX shares.
The bank also undertakes and warrants that it will not purchase or subscribe XOX shares to the extent that would trigger a takeover offer or breach foreign ownership limit.
XOX said RM28.5 million from the gross proceeds will be used to expand Voopee in Malaysia and the region, including Indonesia, the Philippines and Thailand while RM10 million will be used for enhancement and maintenance activities, and expansion of network capacity. The remaining RM1.5 million will be for estimated expenses.
The proposed share issuance is subject to approvals from Bursa Securities and shareholders. The subscription expiry date is 24 months from the date of the fulfillment of the conditions precedent in the subscription agreement.
XOX said the proposed share issuance is the most appropriate avenue of fund raising without having to incur interest expenses or service principal repayments as with conventional bank borrowings or the issuance of debt securities and is the fastest way to raise funds.