Asia Brands to raise funds via rights issue, private placement

PETALING JAYA: Asia Brands Bhd is looking to raise up to RM63.97 million through its proposed renounceable rights issue and private placement exercises.
The group told Bursa Malaysia, the rights issue exercise involves an issuance of up to 116.32 million new shares at an issue price of 35 sen per rights share on the basis of one right share for every one share held.
The rights issue is expected to raise gross proceeds of between RM30.15 million and RM40.71 million, which will be used for the repayment of its RM40 million Islamic medium-term notes (IMTN) (Tranche 1, Series 3) due on March 16, 2019.
The IMTN repayment is expected to result in an estimated interest saving of up to RM2.44 million per annum. Asia Brand’s total outstanding IMTN stands at RM90 million.
Meanwhile, the group will issue up to 46.53 million new shares, representing up to 20% of its enlarged issued shares, for a private placement exercise, upon completion and assuming full subscription of the rights issue.
The placement shares are for independent third party investors to be identified at a later date.
Based on an indicative issue price of 50 sen per placement share, the private placement is expected to raise gross proceeds of up to RM23.26 million to repay the remaining balance of RM10 million of the RM40 million IMTN (Tranche 1, Series 3) and partly repay the RM20 million IMTN (Tranche 1, Series 4) due on March 16, 2020.