PROPOSED PRIVATE PLACEMENT OF UP TO TEN PERCENT (10%) OF THE ISSUED AND PAID- UP SHARE CAPITAL OF NOVAMSC

Transcription

1 NOVA MSC BHD ( OR THE COMPANY ) PROPOSED PRIVATE PLACEMENT OF UP TO TEN PERCENT (10%) OF THE ISSUED AND PAID- UP SHARE CAPITAL OF 1. INTRODUCTION On behalf of the Board of Directors of ( Board ), RHB Investment Bank Berhad ( RHBIB ) wishes to announce that the Company proposes to undertake a private placement of new ordinary shares of RM0.10 each in ( Shares ) of up to ten percent (10%) of the issued and paid-up share capital of the Company ( Placement Shares ), to investors to be identified and at an issue price to be determined by the Board and announced later ( Proposed Private Placement ). The Company had obtained the approval from its shareholders at the last annual general meeting ( AGM ) convened on 27 August 2015, authorising the Board to issue new Shares not exceeding ten percent (10%) of the issued and paid-up share capital of the Company pursuant to Section 132D of the Companies Act, 1965 ( Act ) ( General Mandate ). The said approval shall continue to be in force, unless revoked or varied by the Company at a general meeting, until the conclusion of the next AGM of the Company. Further details on the Proposed Private Placement are set out in the following sections. 2. DETAILS OF THE PROPOSED PRIVATE PLACEMENT 2.1 Size of the Proposed Private Placement As at 11 September 2015, being the latest practicable date prior to the date of this announcement ( LPD ), the issued and paid-up share capital of is RM49,798,760 comprising 497,987,600 Shares. In addition, as at the LPD, the Company has 4,520,000 outstanding options that were granted to eligible employees and directors pursuant to its existing employee share option scheme ( ESOS ). Based on the above, the Proposed Private Placement will entail the issuance of up to 50,250,760 Shares, representing ten percent (10%) of the enlarged issued and paid-up share capital of, assuming that all 4,520,000 outstanding ESOS options are exercised into Shares prior to the implementation of the Proposed Private Placement. The actual number of Placement Shares to be issued pursuant to the Proposed Private Placement will be determined at a later date. Subject to prevailing market conditions, the Proposed Private Placement may be implemented in one (1) or more tranches within six (6) months after the receipt of all relevant approvals for the Proposed Private Placement or any extended period as may be approved by Bursa Malaysia Securities Berhad ( Bursa Securities ), depending on the timing of identification of the placee(s) and investors interest at the point of implementation, subject always to the expiry of the General Mandate or a new mandate being obtained from shareholders of the Company, as the case may be. 1

2 2.2 Basis of determining and justification for the issue price of the Placement Shares The Placement Shares will be issued based on a discount, if any, of not more than ten percent (10%) to the five (5)-day volume weighted average price ( VWAP ) of Shares immediately preceding the price-fixing date, to be determined by the Board after obtaining all the relevant approvals for the Proposed Private Placement. In any case, the issue price of the Placement Shares will not be lower than the par value of the Shares of RM0.10 each. As the Proposed Private Placement may be implemented in tranches within six (6) months, there could potentially be several price fixing dates and issue prices. For illustrative purposes only, the indicative issue price of the Placement Shares is assumed at RM0.105 per Placement Share, which is priced at a discount of 9.48% to the five (5)-day VWAP of the Shares up to and including 11 September 2015 (being the last trading day prior to the announcement) of RM Allocation to placees The Placement Shares will be placed to third (3 rd ) party investors to be identified at a later date, and such investor(s) shall be person(s) who/which qualify under Schedule 6 and 7 of the Capital Markets and Services Act, In accordance with Rule 6.05(c) of the ACE Market Listing Requirements of Bursa Securities ( Listing Requirements ), the Placement Shares will not be placed to the following parties: (a) (b) (c) a director, major shareholder or chief executive of or a holding company of ; or a person connected with an interested director, interested major shareholder or interested chief executive; and nominee corporations, unless the names of the ultimate beneficiaries are disclosed. 2.4 Ranking of the Placement Shares The Placement Shares shall, upon allotment and issuance, rank pari passu in all respects with the then existing Shares, save and except that the Placement Shares will not be entitled to any dividend, rights, allotment and/or other distribution that may be declared, made or paid, the entitlement date of which is prior to or on the date of allotment of the Placement Shares. 2.5 Listing of and quotation for the Placement Shares An application will be made to Bursa Securities for the listing of and quotation for the Placement Shares to be issued pursuant to the Proposed Private Placement on the ACE Market of Bursa Securities. 2.6 Utilisation of proceeds The Company is unable to determine the actual amount of proceeds to be raised from the Proposed Private Placement at this juncture as the amount to be raised will depend on, amongst others, the actual issue price and the actual number of Placement Shares to be issued. 2

3 For illustrative purpose, the effects of the Proposed Private Placement shall be based on two (2) scenarios as follows: Minimum Scenario Maximum Scenario : Assuming that none of the outstanding ESOS options are exercised prior to the implementation of the Proposed Private Placement and the Placement Shares are fully placed out : Assuming that all of the outstanding ESOS options are fully exercised prior to the implementation of the Proposed Private Placement and the Placement Shares are fully placed out For illustrative purposes, based on an indicative issue price of RM0.105 per Placement Share, representing a discount of approximately 9.48% to the five (5)-day volume weighted average price of Shares up to and including 11 September 2015 of RM0.116, the Proposed Private Placement is expected to raise gross proceeds of up to RM5,276,330. The proceeds raised are expected to be utilised in the manner set out below: Minimum Scenario Maximum Scenario Details of utilisation RM 000 RM 000 Estimated timeframe for utilisation of proceeds Working capital (1) 5,079 5,126 Within twelve (12) months from the date of completion of the Proposed Private Placement Estimated expenses (2) Within one (1) month from the date of completion of the Proposed Private Placement Total 5,229 5,276 Notes: (1) The proceeds will be utilised to finance the Group s day-to-day working capital requirements, which include inter alia the following: (i) (ii) financing the deployment of the Company s existing IT projects such as the purchase of hardware, software, cost of maintenance of third party material as well as employment of additional professional technical staff within the estimated timeframe for utilisation of proceeds to enhance the implementation of the existing IT projects; financing the marketing and general operations via the employment of additional sales and marketing staff in the overseas operation and to increase its technical staff strength in the overseas operation within the estimated timeframe for utilisation of proceeds in order to improve services in the countries that the Group operates in. The management of is currently unable to quantify the respective number of sales and marketing staff and technical staff to be employed and when will hire at this juncture as the Company is still undergoing preliminary studies to determine how best to expand their business operations. The amount is expected to be utilised within twelve (12) months from the date of completion of the Proposed Private Placement. The actual proceeds to be utilised for working capital will depend on the actual proceeds to be raised from the Proposed Private Placement which is dependent on the number of Placement Shares issued and the issue price of the Placement Shares. (2) The estimated expenses consist of professional fees, fees payable to authorities, placement management fee and placement commission and other miscellaneous expenses to be incurred in relation to the Proposed Private Placement. Any variation in the actual amount of expenses will be adjusted to/from the amount allocated for working capital portion. Pending utilisation of proceeds from the Proposed Private Placement will be placed with financial institutions or short term money market instruments. 3

4 3. RATIONALE FOR THE PROPOSED PRIVATE PLACEMENT The Proposed Private Placement will enable the Company to raise additional funds without incurring interest costs, as compared to bank borrowings and to raise additional funds for the working capital of the Group, including the financing of projects, sales and marketing of the Group. With a larger capital base, the Group will be able to capitalise on future business opportunities. In addition, equity financing will strengthen the capital base to a level to commensurate with the value of its assets employed and reduce the financial risk of the Group as compared to taking on additional borrowings. Further, the implementation of the Proposed Private Placement will enable the Group to strengthen its financial position with enhanced shareholders funds and reduced gearing level. These factors are expected to facilitate the continuing growth of the Group. 4. EFFECTS OF THE PROPOSED PRIVATE PLACEMENT The proforma effects of the Proposed Private Placement on the issued and paid-up share capital, net asset ( NA ) and gearing, earnings and substantial shareholdings of Group are set out below: 4.1 Issued and paid-up share capital For illustrative purposes, the proforma effects of the Proposed Private Placement on the issued and paid-up share capital of are as follows: Minimum Scenario Maximum Scenario Shares RM Shares RM Existing as at the LPD 497,987,600 49,798, ,987,600 49,798,760 To be issued assuming full exercise of the outstanding ESOS options To be issued pursuant to the Proposed Private Placement Enlarged issued and paid-up share capital - - 4,520, , ,987,600 49,798, ,507,600 50,250,760 49,798,760 4,979,876 50,250,760 5,025, ,786,360 54,778, ,758,360 55,275,836 THE REST OF THE PAGE HAS BEEN INTENTIONALLY LEFT BLANK 4

5 4.2 NA and gearing Based on the latest audited consolidated financial statements of as at 31 March 2015, the proforma effects of the Proposed Private Placement on the consolidated NA and gearing are as follows: Minimum Scenario: Audited as at 31 March 2015 Adjusted for the subsequent event (1) After the Proposed Private Placement RM RM RM Share capital 49,359,260 49,798,760 (1) 54,778,636 (2) Share premium 11,658,531 11,658,531 11,757,525 (2)(3) Foreign currency translation reserve 5,989,531 5,989,531 5,989,531 Equity compensation reserve 513, , ,871 Accumulated losses (29,674,232) (29,674,232) (29,674,232) NA/ Shareholders funds 37,846,961 38,286,461 43,365,331 Non-controlling interest 27,701 27,701 27,701 Total equity 37,874,662 38,314,162 43,393,032 ordinary shares 493,592, ,987, ,786,360 NA per share (sen) Total borrowings 1,999,118 1,999,118 1,999,118 Gearing (times) Notes: (1) Adjusted for the issuance of 4,395,000 Shares arising from the exercise of the ESOS options subsequent to the financial year end up to the LPD. (2) Assuming 49,798,760 Placement Shares are issued at an indicative issue price of RM0.105 per Placement Share. (3) After deducting the estimated expenses for the Proposed Private Placement of RM150,000. THE REST OF THE PAGE HAS BEEN INTENTIONALLY LEFT BLANK 5

6 Maximum Scenario: Audited as at 31 March 2015 Adjusted for the subsequent event (1) Proforma I After adjusting for full exercise of outstanding ESOS Options Proforma II After Proforma I and the Proposed Private Placement RM RM RM RM Share capital 49,359,260 49,798,760 (1) 50,250,760 (2) 55,275,836 (3) Share premium 11,658,531 11,658,531 11,658,531 11,759,785 (3)(4) Foreign currency translation reserve 5,989,531 5,989,531 5,989,531 5,989,531 Equity compensation reserve 513, , , ,871 Accumulated losses (29,674,232) (29,674,232) (29,674,232) (29,674,232) NA/ Shareholders funds 37,846,961 38,286,461 38,738,461 43,864,791 Non-controlling interest 27,701 27,701 27,701 27,701 Total equity 37,874,662 38,314,162 38,766,162 43,892,492 ordinary shares 493,592, ,987, ,507, ,758,360 NA per share (sen) Total borrowings 1,999,118 1,999,118 1,999,118 1,999,118 Gearing (times) Notes: (1) Adjusted for the issuance of 4,395,000 Shares arising from the exercise of the ESOS options subsequent to the financial year end up to the LPD. (2) Assuming that all of the 4,520,000 outstanding ESOS options that has been granted are exercised at an exercise price of RM0.105 before the implementation of the Proposed Private Placement. (3) Assuming 50,250,760 Placement Shares are issued at an indicative issue price of RM0.105 per Placement Share. (4) After deducting the estimated expenses for the Proposed Private Placement of RM150,000. 6

7 4.3 Earnings and earnings per share The Proposed Private Placement is not expected to have any material effect on the earnings of Group for the financial year ending 31 March 2016, except that the earnings per share of Group will be proportionately diluted due to the increase in number of Shares as a result of the issuance of Placement Shares pursuant to the Proposed Private Placement. 4.4 Existing convertible securities As at the LPD, does not have any convertible securities save for 4,520,000 outstanding ESOS options granted to its eligible employees and directors. The Proposed Private Placement will not have any effect on the ESOS Options in. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 7

8 4.5 Substantial shareholders shareholdings The proforma effects of the Proposed Private Placement on the shareholdings of s substantial shareholders as at the LPD are set out below: Minimum Scenario: Shareholders As at the LPD After the Proposed Private Placement Direct Indirect Direct Indirect Maybank Securities Nominees (Asing) Sdn Bhd 42,849, ,849, Maybank Kim Eng Securities Pte Ltd For Zylog Systems Asia Pacific Pte Ltd TDSN 5,160, ,178,150 (1) ,160, ,178,150 (1) 8.25 Raden Corporation Sdn Bhd 39,178, ,178, Note: (1) Deemed interested by virtue of his directorship and substantial shareholding in Raden Corporation Sdn Bhd, by virtue of his directorship and substantial shareholdings in Syarikat Pesaka Antah Sdn Bhd which owns the entire issued and paid up capital of Pesaka Antah Holding Sdn Bhd and by virtue of the shares held by his brother Y.A.M Tunku Naquiyuddin Ibni Almarhum Tuanku Ja afar pursuant to Section 6A of the Act. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 8

9 Maximum Scenario: Shareholders Proforma I As at the LPD After full exercise of ESOS options Direct Indirect Direct Indirect Maybank Securities Nominees (Asing) Sdn Bhd 42,849, ,849, Maybank Kim Eng Securities Pte Ltd For Zylog Systems Asia Pacific Pte Ltd TDSN 5,160, ,178,150 (1) ,160, ,178,150 (1) 8.99 Raden Corporation Sdn Bhd 39,178, ,178, Shareholders Proforma II After Proforma I and the Proposed Private Placement Direct Indirect Maybank Securities Nominees (Asing) Sdn Bhd 42,849, Maybank Kim Eng Securities Pte Ltd For Zylog Systems Asia Pacific Pte Ltd TDSN 5,160, ,178,150 (1) 8.17 Raden Corporation Sdn Bhd 39,178, Note: (1) Deemed interested by virtue of his directorship and substantial shareholding in Raden Corporation Sdn Bhd, by virtue of his directorship and substantial shareholdings in Syarikat Pesaka Antah Sdn Bhd which owns the entire issued and paid up capital of Pesaka Antah Holding Sdn Bhd and by virtue of the shares held by his brother Y.A.M Tunku Naquiyuddin Ibni Almarhum Tuanku Ja afar pursuant to Section 6A of the Act. 9

10 5. APPROVALS REQUIRED The Proposed Private Placement is subject to and conditional upon the following approvals being obtained: (i) (ii) Bursa Securities for the listing of and quotation for the Placement Shares on the ACE Market of Bursa Securities; and Approvals of any relevant authorities and/or parties, if required. The Company had obtained approval from its shareholders at the last AGM convened on 27 August 2015, authorising the Board to issue new Shares not exceeding ten percent (10%) of the issued and paid-up share capital of the Company pursuant to Section 132D of the Act. The approval shall continue to be in force, unless revoked or varied by the Company at a general meeting, until the conclusion of the next AGM of the Company. The Proposed Private Placement is not conditional upon any other corporate exercise undertaken or to be undertaken by the Company. 6. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED None of the Directors, major shareholders of and/or persons connected to them have any interest, direct and/or indirect, in the Proposed Private Placement. 7. DIRECTORS RECOMMENDATION The Board having considered all aspects of the Proposed Private Placement, including the rationale and its financial effects on Group, is of the opinion that the Proposed Private Placement is in the best interests of the Company. 8. PRINCIPAL ADVISER RHBIB has been appointed by the Company to act as the Principal Adviser for the Proposed Private Placement. 9. ESTIMATED TIMEFRAME FOR SUBMISSION TO AUTHORITIES AND COMPLETION The applications to the relevant authorities, in particular Bursa Securities, will be made within one (1) month from the date of this announcement. Barring unforeseen circumstances, the Proposed Private Placement is expected to be completed by the fourth (4 th ) quarter of calendar year This announcement is dated 14 September