Melewar Industrial Group proposes share capital reduction, rights issue

KUALA LUMPUR (Jan 31): MELEWAR INDUSTRIAL GROUP BHD []
(MIG) has proposed a corporate exercise involving a share capital
reduction and a renounceable rights issue of up to 150.348 million new
shares.
MIG said on Tuesday the rights issue, at an indicative price of 40 sen
per rights share, the rights share would enable it to raise between
RM21.97 million and RM60.14 million.
As for the share capital reduction, this would involve cancelling 75 sen of
the par value of every existing RM1 share. The share capital reduction
would not result in any adjustment to the share price and existing
number of shares issued in the company.
MIG explained that its shares had been trading on Bursa Securities below its existing par value of RM1 per share since April
15, 2011. The last traded price on Jan 27 was 53 sen, which was a discount of 47.0% to the par value of RM1 per share.
“The current market price of MIG's shares is, therefore, not conducive for MIG to embark on any fund raising exercise and/
or corporate exercise involving new issuance of shares,” it said.
MIG added the proposed share capital reduction would enable it to undertake the rights issue at an indicative price of 40 sen
each.
It said the renounceable rights issue of 150.348 million new shares would be on the basis of two rights shares for every three
existing shares held.
As at Jan 27, 2012, MIG’s paid-up was RM226.75 million, comprising 226.755 million shares of RM1 each including 1.23
million treasury shares.
The board has resolved to cancel all the existing 1.23 million treasury shares prior to the implementation of the proposals,
which would reduce the paid-up by 1.23 million.
As for the share capital reduction, MIG said that 75 sen of the par value of every share of RM1 each would be cancelled.
Upon completion of the proposed treasury shares cancellation, the proposed share capital reduction will reduce the paid-up to
RM56.38 million, comprising of 225.522 million MIG shares.
“The proposed share capital reduction will give rise to a credit of RM169.14 million which will be transferred to a
non-distributable capital reserve account of MIG,” it said.
MIG added the proposed rights issue would be implemented after the completion of the proposed share capital reduction.