MRCB can issue free warrants to non-residents

Of the estimated RM77.63mil that would be raised, RM66.63mil would go towards working capital and capital expenditure (capex), RM10mil to retire some of its borrowings and RM1mil to pay for expenses related to the fundraising.

Some 75% of the proceeds apportioned for working capital would be used to finance the firm’s existing and future projects for the power utilities industry.

The remaining 25% would be utilised for the procurement of raw materials for Sarawak Cable’s manufacturing operations and capex within its ordinary course of business.

The company’s bank borrowings totalled RM123mil as at Dec 31, 2012. “Based on its effective interest rate of approximately 6% per annum, the partial repayment of its debt was expected to result in interest cost savings of about RM600,000 per year,” the company said. KUALA LUMPUR: Bank Negara has given its consent to Malaysian Resources Corp Bhd (MRCB) to issue free warrants to non-residents of the country, which is part of its corporate exercise with Gapurna Sdn Bhd.

MRCB said in a filing with Bursa Malaysia that the consent was for the issuance of the warrants to entitled shareholders on the basis of one free warrant for every three MRCB shares held at an entitlement date to be determined later.

It said Bank Negara also gave its consent for the issuance of any addi- tional warrants to be issued, following any adjustments that might be made from time to time.

To recap, MRCB had on Feb 8 sought the central bank’s approval following its corporate exercise where Datuk Mohamad Salim Fateh Din’s Gapurna would inject 13.35 ha of prime land in the Klang Valley into its landbank for future development.

In the RM729mil deal, Gapurna would end up with a 16.8% equity stake in MRCB under the cash and share-swap deal, with Salim taking up the mantle of main driver of the property and construction company.

MRCB is also issuing free warrants to its existing shareholders on the basis of one warrant for every three existing shares held in MRCB, with the exercise price set at RM2.30.

Under the deal, MRCB had proposed to buy companies related to Gapurna for RM729mil, to be satisfied by RM110mil cash and the issuance of 398.7 million MRCB shares attached with 113.9 million free warrants on the basis of every two new MRCB warrants for every seven new shares held.