Asia Media rights issue gets shareholders' nod

PETALING JAYA (July 30, 2013): Asia Media Group Bhd's shareholders have agreed for the company to raise between RM19.56 million and RM97.8 million through a rights issue to construct new transmission towers in Johor Baru and Penang.

It recently completed the construction of five transmission towers in the Klang Valley – namely in Puchong, USJ 19, Berjaya Times Square, Bukit Lanjan and Bukit Sungai Besi.

The company said the shareholders had voted to approve the corporate exercise at its EGM yesterday.

Under the rights exercise, Asia Media will offer up to 752.4 million new shares on the basis of one rights share for every existing share held, with up to 188.1 million free new warrants on the basis of one warrant for every four rights shares subscribed by the shareholder.

"The rights issue with warrants allows the company to raise capital without incurring interest costs as compared with other means of financing," said its chairman Datuk Wira Syed Ali Alhabshee.

"Shareholders are able to participate in the future growth of the company while it preserves its optimal level of gearing. The company's strong cash-flow position will be preserved while its balance sheet strengthened," he added.

Asia Media said the exercise is not expected to have an immediate material impact on its consolidated earnings and earnings per share for the financial year ending Dec 31, 2013 as the proposal is only expected to be completed in the third quarter of 2013.

The proceeds raised are to be utilised within 12 to 18 months from the date of the listing of the rights shares.

Asia Media CEO Datuk Ricky Wong said the rationale behind the proposal of raising further capital from shareholders is to allow the company to remain in control, avoiding reliance on government grants or taxpayers.

"The company expects returns to come from further advertising across the network and capturing business from the traditional print and audio/visual media, which will contribute to both the top and bottom lines once live transmission is rolled out," he said.

To date, it has installed 3,993 LCD-TV screens on Malaysia's public transport system, which reaches over 2 million Malaysians a day.