SOUTHERN CABLE PROPOSES ONE-FOR-TWO BONUS ISSUE OF WARRANTS TO RAISE RM117 MLN

KUALA LUMPUR, Aug 8 (Bernama) -- Southern Cable Group Bhd has proposed to undertake a bonus issue of warrants, on the basis of one warrant for every two existing ordinary shares held.

The cable manufacturer said the proposal entails the issuance of 400 million five-year warrants, with an option for holders to exercise one warrant into one new ordinary share of Southern Cable.

The company said with the indicative exercise price of RM0.2942 per warrant and assuming full exercise of the warrants, the group expects to raise up to RM117.7 million in gross proceeds to be utilised as working capital requirements.

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Its managing director Tung Eng Hai said the capital exercise will enable the company to “capture its optimistic outlook in the near term, in line with operational requirements and business development strategies.”

“The working capital would also aid in fulfilling our total orders in hand exceeding RM800 million, which includes the recently secured RM294 million supply contract from Tenaga Nasional Bhd.

“Furthermore, we are intensifying our sales efforts to target new markets in Malaysia and overseas, for instance from our new customer in the United States,” he said in a statement.

The company said that the majority of funds raised will go towards supporting increased working capital requirements and would provide shareholders with an opportunity to increase their equity participation in the company.

The corporate exercise is subject to shareholders’ approval during an extraordinary general meeting to be convened, following which the entitlement date of the warrants and its actual exercise price would be determined at a later date, according to the statement.

-- BERNAMA