Ahmad Zaki plans capital reduction, rights issue

by **Cals** Wed 15 Jan 2014, 23:14

Business & Markets 2014

Written by Ho Wah Foon of theedgemalaysia.com

Wednesday, 15 January 2014 20:11

KUALA LUMPUR (Jan 15): Ahmad Zaki Resources Bhd (AZRB) has announced a major corporate exercise that includes the undertaking of a 50% capital reduction exercise and rights issue with warrants.

In a filing with Bursa Malaysia, AZRB said it intends to start afresh with the par value reduction after landing itself in an accumulated loss position, due primarily to a write-off of an advance to a subsidiary incurred in 2010.

“It is the intention of the board that the proposed par value reduction be undertaken in order for the company to be able to start afresh and create a platform for the company to rationalise its balance sheet.

“Hence, the proposed par value reduction provides an opportunity for the company to eliminate its accumulated losses and strengthen its financial position moving forward.”

It said the proposed rights Issue with warrants can help to partly fund the company’s equity requirements for identified revenue generating
investments and to increase shareholders’ funds and repay borrowings.

Details of the two proposals are:

(i) Reduction of the issued and paid-up share capital of AZRB via the cancellation of RM0.25 of the par value of each existing ordinary share of RM0.50 each in AZRB;

(ii) Undertaking a renounceable rights issue of up to 207,706,641 new ordinary shares of RM0.25 each in the AZRB shares together with up to 103,853,320 free detachable warrants at an issue price of RM0.50 per rights share on the basis of six rights shares together with three free warrants for every eight existing AZRB shares held after the proposed par value reduction.

At market close, AZRB’s share ended down 1.5 sen at 91 sen per unit. Its net asset per share was 76.7 sen as at end-September 2013.