Reliance Pacific Berhad ("RPB" Or "Company") - Proposed Two-Call Rights Issue Of Up To 62,409,028 New Ordinary Shares Of Rm1.00 Each At An Indicative Issue Price of Rm1.00 Each (Of Which The First Call Of Rm0.65 Is Payable In Cash On Application And the Second Call Of Rm0.35 Is Payable Out Of The Company's Share Premium Account) On The Basis Of One (1) New Ordinary Share For Every Two (2) Existing Ordinary Shares Of Rm1.00 Each Held On An Entitlement Date To Be Determined - Proposed Bonus Issue Of Up To 31,204,514 New Ordinary Shares Of Rm1.00 Each On The Basis Of One (1) New Ordinary Share Of Rm1.00 Each For Every Four (4) Existing Ordinary Shares Of Rm1.00 Each Held On An Entitlement Date To Be Determined
BackNov 07, 2002
| General Announcement Reference No MM-021007-39685 |
| Submitting Merchant Bank | : | AMMERCHANT BANK BERHAD (FORMERLY KNOWN AS ARAB-MALAYSIAN MERCHANT BANK BERHAD) |
| Company Name | : | RELIANCE PACIFIC BERHAD |
| Stock Name | : | RPB |
| Date Announced | : | 07/11/2002 |
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| Type | : | Announcement |
| Subject | : | RELIANCE PACIFIC BERHAD ("RPB" or "COMPANY") - PROPOSED TWO-CALL RIGHTS ISSUE OF UP TO 62,409,028 NEW ORDINARY SHARES OF RM1.00 EACH AT AN INDICATIVE ISSUE PRICE OF RM1.00 EACH (OF WHICH THE FIRST CALL OF RM0.65 IS PAYABLE IN CASH ON APPLICATION AND THE SECOND CALL OF RM0.35 IS PAYABLE OUT OF THE COMPANY'S SHARE PREMIUM ACCOUNT) ON THE BASIS OF ONE (1) NEW ORDINARY SHARE FOR EVERY TWO (2) EXISTING ORDINARY SHARES OF RM1.00 EACH HELD ON AN ENTITLEMENT DATE TO BE DETERMINED - PROPOSED BONUS ISSUE OF UP TO 31,204,514 NEW ORDINARY SHARES OF RM1.00 EACH ON THE BASIS OF ONE (1) NEW ORDINARY SHARE OF RM1.00 EACH FOR EVERY FOUR (4) EXISTING ORDINARY SHARES OF RM1.00 EACH HELD ON AN ENTITLEMENT DATE TO BE DETERMINED |
Contents :
1. INTRODUCTION
AmMerchant Bank Berhad (formerly known as Arab-Malaysian Merchant Bank Berhad) ("AmMerchant Bank"), on behalf of the Board of Directors of RPB, had on 30 August 1999 announced the following proposals:-
a) Proposed bonus issue of up to 31,204,514 new ordinary shares of RM1.00 each ("Shares") on the basis of one (1) new Share for every four (4) existing Shares held ("Proposed Bonus Issue"); and
b) Proposed rights issue of up to 62,409,028 new Shares at an issue price of RM1.00 each together with up to 31,204,514 free detachable Warrant B on the basis of two (2) new Shares with one (1) free detachable Warrant B for every four (4) existing Shares held ("Proposed Rights Issue of Shares with Warrant B").
The approvals of Securities Commission ("SC") for the Proposed Bonus Issue and the Proposed Rights Issue of Shares with Warrant B were obtained on 25 November 1999. Additional approvals were obtained from the SC on 19 June 2000 and 9 April 2002 for the revisions of the utilisation of proceeds as approved by the SC and the extension of time up to 24 November 2002 for the implementation of the Proposed Bonus Issue and Proposed Rights Issue of Shares with Warrant B. The Proposed Bonus Issue and the Proposed Rights Issue of Shares with Warrant B were approved by the shareholders of RPB at an Extraordinary General Meeting held on 19 December 2000.
On behalf of the Board of Directors of RPB, AmMerchant Bank is pleased to announce that the Company is proposing to revise the Proposed Rights Issue of Shares with Warrant B and implement it on a "two-call" basis and without the free detachable Warrrant B as follows :-
- proposed two-call rights issue of up to 62,409,028 new Shares at an indicative issue price of RM1.00 each (of which the first call of RM0.65 is payable in cash on application and the second call of RM0.35 is payable out of the company's share premium account) on the basis of one (1) new Share for every two (2) existing Shares held on an entitlement date to be determined ("Proposed Two-Call Rights Issue of Shares ")
The Company is proposing a two-call rights issue in order to take advantage of the liberalisation allowed by the SC on the requirements for the issuance of a two-call rights as announced by the SC on 23 May 2002. The Proposed Two-Call Rights Issue of Shares will also enable the completion of the proposed rights issue exercise in view of the soft market conditions experienced by the Kuala Lumpur Stock Exchange ("KLSE"). There will be no change to the Proposed Bonus Issue as approved by the SC as mentioned above.
The Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares are inter-conditional upon one another and will be implemented after all the relevant approvals in Section 6 of this announcement have been obtained.
2.1. The Proposed Two-Call Rights Issue of Shares
The Proposed Two-Call Rights Issue of Shares will entail the issuance of up to 62,409,028 new Shares at an indicative issue price of RM1.00 per share, of which RM0.65 is payable in cash on application and RM0.35 is payable out of the Company's share premium account on the basis of one (1) new Share for every two (2) existing Shares held on an entitlement date to be determined ("Entitlement Date").
2.2. Basis for Determining the Proposed Rights Issue PriceThe indicative rights issue price of RM1.00 with the first call of RM0.65 per rights share payable in cash on application and the second call of RM0.35 per rights share payable out of the Company's share premium account, was set at a discount of 17.36% from the theoretical ex-all price based on the 5-day weighted average market price of RPB's Shares from 18 October 2002 to 24 October 2002 (both dates inclusive) of RM0.7866 . The proposed issue price will be fixed at a later date.
The rights Shares shall upon allotment and issue, rank pari passu in all respects with the existing Shares of the Company except that they will not be entitled to any dividend or other form of distributions that may be declared before the allotment of the rights Shares. The rights Shares shall not be entitled to the bonus Shares to be issued pursuant to the Proposed Bonus Shares.
The Proposed Two-Call Rights Issue of Shares is expected to raise a lesser amount of funds as compared to the original proposal. The proposed utilisation of proceeds are detailed in table 1 below.
4. RATIONALE FOR THE PROPOSED TWO-CALL RIGHTS ISSUE OF SHARES
The revisions to the Proposed Rights Issue of Shares with Warrant B are proposed to take advantage of the liberalisation allowed by the SC on the requirements for the issuance of a two-call rights as announced by the SC on 23 May 2002. Under the present soft market conditions experienced by the KLSE, the Company believes the proposed rights issue of Shares based on the original terms and conditions could not be successfully implemented. The proposal to exclude the free detachable Warrant B from the rights issue exercise will allow the Company the flexibility in fixing the rights issue price. Based on the revised terms, the Company could attractively price the rights Shares and implement the funds raising exercise.
5.1. Share Capital
The changes in the issued and paid-up share capital as a result of the Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares are detailed in table 2 below.
5.2. Net Tangible Assets ("NTA")
The effect on the NTA as a result of the Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares are detailed in table 3 below.
5.3. EarningsThe Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares are expected to be implemented in the last quarter of the financial year ending 31 March 2003. Therefore, depending on the timing of the completion of the Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares, the results of the RPB Group for the financial year ending 31 March 2003 are not expected to be significantly affected.
However, the long term profitability of the RPB Group is expected to be enhanced by the Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares.
5.4. DividendsIn view of the current business environment, the Board did not recommend any dividend for the financial year ended 31 March 2002. The Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares are not expected to have any material effect on the dividend to be declared if any, by the Company for the financial year ending 31 May 2003.
5.5. Substantial ShareholdersThe Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares will not have any effect on the substantial shareholders of RPB except that the number of Shares held by each shareholder will increase proportionately.
The Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares are inter-conditional upon one another and subject to the following approvals being obtained:-
The approval of SC was obtained on 25 November 1999 for the Proposed Bonus Issue and the Proposed Rights Issue of Shares with Warrant B. On 19 June 2000 and 9 April 2002, additional approvals were obtained from the SC respectively for the revisions of the utilisation of proceeds and extension of time up to 24 November 2002 for the completion of the Proposed Bonus Issue and Proposed Rights Issue of Shares with Warrant B.
Approval of the SC is required for the Proposed Two-Call Rights Issue of Shares. As the Proposed Bonus Issue will be maintained by RPB, new approval from the SC for the Proposed Bonus Issue is not required.
Approval of the SC is required for the Proposed Two-Call Rights Issue of Shares. As the Proposed Bonus Issue will be maintained by RPB, new approval from the SC for the Proposed Bonus Issue is not required.
ii) Shareholders of RPB at EGM to be convened for the Proposed Two-Call Rights Issue of Shares and the Proposed Bonus Issue ;
iii) KLSE for listing of and quotation for the new Shares to be issued pursuant to the Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares; and
iii) KLSE for listing of and quotation for the new Shares to be issued pursuant to the Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares; and
iv) Any other relevant authorities.
7. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTEREST
None of the directors and/or substantial shareholders of RPB and/or persons connected with the directors and/or substantial shareholders of RPB have any interest, direct or indirect, in the Proposed Bonus Issue and the Proposed Two-Call Rights Issue of Shares beyond their entitlements under the Proposed Bonus Issue and Proposed Two-Call Rights Issue, of which all existing shareholders of RPB are entitled to.
The application to the SC for the Proposed Two-Call Rights Issue of Shares is expected to be made within 1 week from the date of this announcement.
This announcement is dated 7 November 2002.
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