HSS Engineers aborts proposals due to fall in its share price

PETALING JAYA: HSS Engineers Bhd has decided to abort its proposals to issue free warrants in the company as bonus for shareholders and its plans for a private placement of up to 20% of its total shares issued due a fall in its share price.

The proposed issuance of warrants, announced Aug 17, was intended to serve as a reward to its shareholders, while the private placement was intended to raise proceeds to finance its business expansion and working capital.

However, HEB’S share price has fallen by 10 sen to 40 sen per share, since the announcement of the proposals on Aug 17.

Due to the fall in share price, the proposed issuance of warrants represents a premium of 7.5% as compared with its current share price and hence, it would be deemed “out of the money” and no longer serve its intended purpose, according to HEB.

Meanwhile, the recent price movement of HEB shares has decreased the gross proceeds to be raised from the proposed private placement from Rm54mil, under the maximum scenario, to Rm44mil.

“The proposed private placement no longer presents itself as the most commercially viable method of fund raising for the company,” it said in a filing with Bursa Malaysia.

“The board will continue to look into alternate forms of fundraising and methods of rewarding shareholders,” it added.

Since Aug 17, it has secured a couple of notable jobs, including a Rm11.6mil contract bagged by its associate SMHB Sdn Bhd from Pengurusan Aset Air Bhd, to be the engineering consultant providing engineering services for the proposed study and construction of a new water treatment plant.