Jaks plans 1-for-2 rights issue of warrants

PETALING JAYA: Jaks Resources Bhd proposes to undertake a renounceable rights issue of up to 278.16 million warrants on the basis of one warrant for every two existing shares held.
Based on an indicative issue price of 25 sen per warrant, the immediate gross proceeds to be raised from the exercise is up to about RM69.54 million.
However, the gross proceeds to be raised are dependent on the actual number of warrants exercised. Based on an indicative exercise price of RM1 per warrant, the maximum gross proceeds are expected to be up to about RM278.16 million.
Jaks will use the proceeds to fund its power plant project in Vietnam, planned renewable energy venture and the repayment of bank borrowings.
Construction works for the engineering, procurement and construction contract under the power plant project commenced in the first quarter of 2016 and is expected to be completed by 2020.
Some RM46.3 million will be utilised to expedite the progress of the contact, in particular for payment of contractors’ progress claims, fabrication of equipment and services rendered.
As at March 31, about 25% of the overall construction work at the project site has been completed.
Jaks said the rights issue exercise seeks to provide the entitled shareholders with an opportunity to subscribe for an equity derivative at a relatively low entry cost.
Its shares closed 3 sen or 2% lower at RM1.44 today on some 4.05 million shares done.