BONIA CORPORATION BERHAD ('Bonia' or 'Company') by h3U571lt

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									MEXTER TECHNOLOGY BERHAD ("MEXTER" OR THE "COMPANY")

PROPOSED PRIVATE PLACEMENT AND ALLOCATION OF 22,363,005 NEW ORDINARY SHARES OF
RM0.10 EACH IN MEXTER, REPRESENTING 25% OF THE EXISTING ISSUED AND PAID-UP SHARE
CAPITAL OF MEXTER, TO TEKNOLOGIKA SERUMPUN SDN BHD, A COMPANY IN WHICH DATUK
AHMAD SHALIMIN BIN AHMAD SHAFFIE, THE CHAIRMAN/INDEPENDENT NON-EXECUTIVE
DIRECTOR OF MEXTER HAS A 50% EQUITY INTEREST, AT AN ISSUE PRICE TO BE DETERMINED
LATER (“PROPOSAL”)

1.    INTRODUCTION

      Alliance Investment Bank Berhad (“Alliance”), on behalf of the Board of Directors of Mexter
      (“Board”), is pleased to announce that the Company wishes to undertake a proposed private
      placement and allocation of 22,363,005 new ordinary shares of RM0.10 each in Mexter (“Mexter
      Shares”)(“Placement Shares”), representing 25% of the existing issued and paid-up share capital of
      Mexter, to Teknologika Serumpun Sdn Bhd (“TSSB”), a company in which Datuk Ahmad Shalimin
      Bin Ahmad Shaffie, the Chairman/Independent Non-Executive Director of Mexter has a 50% equity
      interest, at an issue price to be determined later.

      The Proposal will not be implemented in tranches.


2.    DETAILS OF THE PROPOSAL

2.1   Details of the identified placee

      TSSB is a company incorporated in Malaysia under the Companies Act, 1965 on 12 April 2010.
      The principal activities of the company are that of investment holding. The company has an
      authorised share capital of RM1,000,000 comprising 1,000,000 ordinary shares of RM1.00 each,
      and issued and paid-up share capital of RM10,000 comprising 10,000 ordinary shares of RM1.00
      each as at 14 May 2010.

      The directors of the company are Datuk Ahmad Shalimin Bin Ahmad Shaffie and Khairul Azwan Bin
      Harun and they each hold 5,000 ordinary shares of RM1.00 each in the company respectively.

2.2   Basis of determining the issue price of the Placement Shares

      The issue price of the Placement Shares shall be determined at a later date following the approval
      from the shareholders of Mexter for the Proposal (“Price Fixing Date”), and shall be based on the
      weighted average market price (“WAMP”) of Mexter’s shares for the five (5) market days
      immediately prior to the Price Fixing Date, with a discount, if any, of not more than 10% of the
      WAMP. In any event, the issue price shall not be lower than RM0.10, being the par value of Mexter
      Shares.

      The WAMP of Mexter Shares for the last five (5) traded Market Days up to 20 May 2010 being the
      latest practicable date prior to the date of this announcement was RM0.09, which is lower than the
      par value of Mexter of RM0.10. For the purpose of illustration, we have assumed an indicative issue
      price of RM0.10 per Placement Share.




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2.3   Ranking of the Placement Shares

      The Placement Shares shall, upon the allotment and issue, rank pari passu in all respects with the
      existing Mexter Shares except that they shall not be entitled to participate in any dividends, rights,
      allotments, and/or any other distributions that may be declared, made or paid where the “Record
      Date” is prior to the date of allotment of the new Mexter Shares. “Record Date” means the date as at
      the close of business on which shareholders of Mexter must be registered in the Record of
      Depositors with Bursa Depository in order to participate in any dividends, rights, allotments or other
      distributions.

2.4   Listing of and quotation of the Placement Shares

      Application will be made to Bursa Malaysia Securities Berhad (“Bursa Securities”) for the listing of
      and quotation for the Placement Shares on the ACE Market of Bursa Securities.

2.5   Proposed Allocation

      Rule 6.07 of the Bursa Securities ACE Market Listing Requirements provides that a listed
      corporation or any of its subsidiaries shall not issue shares or other convertible securities to a
      Director, major shareholder, chief executive of the listed corporation or a holding company of the
      listed corporation or person connected to the Director, major shareholder or chief executive unless
      the shareholders have approved the specific allotment to them in a general meeting.

      The Company proposes to allocate 22,363,005 Placement Shares to TSSB, a company in which
      Datuk Ahmad Shalimin Bin Ahmad Shaffie, the Chairman/Independent Non-Executive Director of
      Mexter has a 50% equity interest, at an issue price to be determined later.

      Accordingly, the Proposal is subject to approval by the shareholders of the Company at the
      forthcoming extraordinary general meeting (“EGM”).


3.    UTILISATION OF PROCEEDS

      Assuming the Placement Shares are issued at RM0.10 per Mexter Share, which represents the par
      value of Mexter Shares, the Company is expected to raise approximately RM2.236 million. However,
      the exact amount of gross proceeds to be raised is dependent on the actual issue price and the
      actual number of Placement Shares to be issued, which will be determined at a later date.

      The estimated gross proceeds raised will be used for the following purposes:



                                                                      Expected timeframe for utilisation

      Purpose                                            RM’000
                        (1)
      Working capital                                       2,086     Within 18 months from the date of receipt


      Estimated expenses for the                               150^   Within 3 months from the date of receipt
               (2)
      Proposal
      Total                                                 2,236

      Notes:

      1.       Working capital

               Mexter proposes to utilise the gross proceeds raised to fund the day-to-day operations of the Group,
               comprising inter-alia, staff cost, insurance, rental, utilities (electricity, water and telephone), travelling
               and lodging.




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     2.      Estimated expenses in relation to the Proposal

             Any variations to the actual amount raised or the actual expenses incurred for the Proposal from the
             above estimated amounts will result in an adjustment of the same amount to the amount of proceeds
             allocated for working capital.


4.   RATIONALE FOR THE PROPOSAL

     The Proposal will enable Mexter to raise funds for its working capital requirements without incurring
     additional interest costs.

     In this regard, the Board has decided that the Proposal would be the most appropriate manner to
     raise new equity funds for Mexter after taking into account the following:

     (i)     present market conditions in which the company is operating in, current trading price of
             Mexter Shares and the general liquidity of Mexter Shares, with due regard also to the
             historical financial performance of the Mexter, its subsidiary and associated companies,
             collectively (“Group”); and

     (ii)    the relatively shorter time and lower cost in implementing a private placement exercise
             instead of other alternative equity fund raising modes such as a rights issue.

     TSSB has agreed to participate in the Proposal with the objective of enabling the Company to raise
     these funds for working capital requirements. Further, the Proposal will enable the Company to
     strengthen its balance sheet position with enhanced shareholders’ funds, which will in turn reduce
     the gearing level of the Group.


5.   APPROVALS REQUIRED

     The Proposal is subject to the following approvals being obtained:

     (i)     Bursa Securities for the listing of and quotation for the Placement Shares to be issued
             pursuant to the Proposal;

     (ii)    The shareholders of Mexter at the forthcoming EGM to be convened for the Proposal; and

     (iii)   any other relevant authorities, if required.

     Subsequent to all the approvals being procured above and the completion of the Proposal, Datuk
     Ahmad Shalimin Bin Ahmad Shaffie shall be redesignated from being an Independent Non-
     Executive Director to Non-Independent Non-Executive Director and shall remain as the Chairman
     of Mexter.




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6.   EFFECTS OF THE PROPOSAL

     The proforma effects of the Proposal on share capital, substantial shareholders’ shareholdings, net
     asset (“NA”), gearing and earnings are as follows:

     6.1     Share capital

             The proforma effects of the Proposal on the issued and paid-up share capital of Mexter are
             set out below:

                                                                          No. of
                                                                   Mexter Shares                                 RM

                 Issued and paid-up share                              89,452,020                         8,945,202
                 capital as at 14 May 2010

                 Assuming the allotment of the                         15,973,575                         1,597,358
                 special issue shares* is
                 completed prior to the date of
                 the allotment of the Placement
                 Shares
                                                                     105,425,595                         10,542,560

                 To be issued pursuant to the                          22,363,005                         2,236,300
                 Proposal

                 Enlarged issued and paid-up                         127,788,600                         12,778,860
                 share    capital  after    the
                 placement of the special issue
                 shares and Placement Shares

             Note:

             *      Shareholders of Mexter had at an extraordinary general meeting held on 29 June 2009 approved
                    the issue and allotment of up to 30% of the enlarged issued and paid up share capital of Mexter
                    (after the private placement and special issue) as set out in the Circular to Shareholders dated 5
                    June 2009. In view of the liberalisation of the bumiputera equity requirement, Mexter shall only be
                    required to place out 12.5% of its enlarged share capital to bumiputera investors. The placement
                    of 12.5% of Mexter’s enlarged share capital to bumiputera investors is now pending
                    implementation.




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6.2   Substantial Shareholders’ Shareholdings

      The proforma effects of the Proposal on the substantial shareholders’ shareholdings of Mexter, as extracted from the Register of Substantial
      Shareholders as at 14 May 2010, are as follows:

                                                                                                         (I)
                                                                                 Assuming the allotment of the special issue
                                                                                 shares is completed prior to the date of the                           After (I) and the
                                                                                                                            (i)
                                            As at 14 May 2010                        allotment of the Placement Shares                                       Proposal
                            <--------Direct------>     <-------Indirect------>   <--------Direct------->     <-------Indirect----->   <--------Direct--------->     <-------Indirect------>
                                 No. of                      No. of                    No. of                      No. of                     No. of                      No. of
                                Mexter                      Mexter                    Mexter                     Mexter                      Mexter                     Mexter
        Substantial             Shares                      Shares                    Shares                     Shares                     Shares                      Shares
        Shareholders                held % held                 held    % held            held    % held             held % held                held % held                 held     % held

        Ivan Sia Teck      28,213,247      31.54                 -           -    28,213,247       26.76               -          -    28,213,247       22.08                  -          -
        Fatt
        Kuan Khian           8,596,200       9.61                -           -      8,596,200       8.15               -          -      8,596,200       6.73                  -          -
        Leng
        TSSB                          -         -                -           -               -         -               -          -    22,363,005       17.50                  -          -
                                                                                                                                                                               #
        Datuk Ahmad                   -         -                -           -               -         -               -          -               -          -    22,363,005         17.50
        Shalimin Bin
        Ahmad Shaffie
                                                                                                                                                                               #
        Khairul Azwan                 -         -                -           -               -         -               -          -               -          -    22,363,005         17.50
        Bin Harun

      Notes:

      #        Deemed interested by virtue of his shareholdings in TSSB pursuant to Section 6A of the Companies Act, 1965.
      (i)      Assuming the placement of the special issue shares will be made to placees which will hold less than 5% each of the enlarged share capital of Mexter
               subsequent to the completion of the Proposal.




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6.3   NA and Gearing

      The proforma effect of the Proposals on the NA and gearing of the Mexter Group based on
      the audited consolidated financial statements of Mexter for the FYE 31 December 2009, are
      as follows:

                                                                                   (I)
                                                                       Assuming the
                                                                    allotment of the
                                                                special issue shares
                                                               is completed prior to
                                                                      the date of the           After (I)
                                              Audited as at 31      allotment of the            and the
                                                                                    (i)               (ii)
                                              December 2009 Placement Shares                 Proposal
                                                      RM’000                 RM’000             RM’000

        Share capital                                     8,945                 10,543            12,779

        Share premium                                     9,382                  9,382             9,382

        Other reserves                                       94                        94              94
                                                                                                         (iii)
        Accumulated losses                             (12,459)               (12,459)        (12,609)

        Shareholders’ funds/ NA                           5,962                  7,560             9,646

        No. of Mexter Shares in issue                   89,452                105,426           127,789
        (‘000)

        NA per share (RM)                                  0.07                   0.07               0.08

        Total borrowings                                  2,255                  2,255             2,255

        Gearing (times)                                    0.38                   0.30               0.23

      Notes:

      (i)      Assuming the special issue shares are implemented based on an issue price of RM0.10 per
               special issue share.

      (ii)     Assuming the Placement Shares are implemented based on an issue price of RM0.10 per
               Placement Share.

      (iii)    After deducting the estimated expenses for the Proposal of RM150,000.

      No convertible securities have been issued by Mexter to-date.

6.4   Earnings
                                                              rd
      The Proposal is expected to be completed by third (3 ) quarter 2010. The Proposal will dilute
      the EPS of the Company in view of the enlarged share capital after the Proposal.
      Nevertheless, the Group will be able to save on potential finance costs that would have
      otherwise been incurred had the Company raised an equivalent amount of funds via bank
      borrowings.

      For illustration, the finance charges on RM2.086 million of bank borrowings being raised for
      working capital would amount to approximately RM0.13 million per annum based on an
      indicative annual interest rate of approximately 6%.

      The utilisation of proceeds for working capital purpose is not expected to have any material
      impact on the consolidated EPS of Mexter in the future.




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7.    ESTIMATED TIMEFRAME FOR COMPLETION
                                                                                                     rd
      Barring unforeseen circumstances, the Proposal is expected to be completed by the third (3 )
      quarter of 2010.


8.    INTENDED CORPORATE EXERCISE ANNOUNCED BUT PENDING COMPLETION

      The Board confirms that, as at 14 May 2010, save for the Proposal and the special issue
      exercise which is pending implementation as set out in Section 6 above, there are no other
      corporate exercises intended which have been announced and are pending completion.

      The Proposal is not conditional upon any other corporate proposals.


9.    INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED

      Datuk Ahmad Shalimin Bin Ahmad Shaffie is the Chairman/Independent Non-Executive
      Director of Mexter and is deemed interested in the Proposal. As at 14 May 2010, Datuk
      Ahmad Shalimin Bin Ahmad Shaffie and persons connected to him does not have any direct
      and indirect shareholding in Mexter.

      Accordingly, Datuk Ahmad Shalimin Bin Ahmad Shaffie has abstained and will continue to
      abstain from voting and deliberating on the Proposal at all Board meetings of the Company.
      He shall also abstain and has undertaken that he shall ensure that all persons connected
      with him will abstain from voting in respect of their direct and indirect interests in the
      Company on the ordinary resolution pertaining to the Proposal.

      Save for Datuk Ahmad Shalimin Bin Ahmad Shaffie, none of the directors and/or major
      shareholders of Mexter and/or persons connected to them have any interest, either direct or
      indirect, in the Proposal.


10.   DIRECTORS’ RECOMMENDATION

      The Board (save for Datuk Ahmad Shalimin Bin Ahmad Shaffie), after having considered all
      aspects of the Proposal, is of the opinion that the Proposal is in the best interest of the
      Company and its shareholders.

      Accordingly, the Board (save for Datuk Ahmad Shalimin Bin Ahmad Shaffie) recommends
      that you vote in favour of the ordinary resolution pertaining to the Proposal to be tabled at the
      forthcoming EGM.


11.   ADVISER

      Alliance has been appointed as the adviser and placement agent for the Proposal.


12.   APPLICATION TO THE AUTHORITIES

      Applications to the regulatory authorities namely Bursa Securities is expected to be made
      within two (2) months from the date of this announcement.

      This announcement is dated 21 May 2010.




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