China Auto drops share sale plan

by **Cals** Wed 20 Nov 2013, 18:39

Business & Markets 2013

Written by Fatin Rasyiqah Mustaza of theedgemalaysia.com

Wednesday, 20 November 2013 10:41

KUALA LUMPUR: China Automobile Parts Holdings Ltd (CAP) has decided to abort its proposed private placement of up to 60 million new shares to third party investors.
The automotive components manufacturer said in an announcement to Bursa Malaysia that the cancellation of the proposed private placement would not affect the proposed bonus warrant issue.
“All other details of the proposed bonus issue of warrants as announced previously shall remain unchanged, save and except for any effects arising as a consequence of aborting the proposed private placement,” said CAP.
“Mercury Securities will retract the additional listing application in respect of the proposed private placement from Bursa Securities Malaysia,” it said.
In early October, CAP raised eyebrows by announcing the private placement exercise and a bonus issue of up to 330 million warrants just nine months after being listed on the Main Market when its share price was seeing a downtrend.
The counter was down two sen or 4.8% at 40 sen yesterday, with 17.35 million shares changing hands.
Initially, CAP planned to distribute one warrant for every two shares held under the share placement exercise.
“For implementation purposes, the proposed private placement is expected to be completed before the entitlement date. As such, the placement share will also be entitled to the proposed bonus issue of warrants.
“Based on the company’s enlarged issued and paid-up share capital after the proposed private placement of up to 660 million shares [assuming a total of 60 million shares were issued under the proposed private placement], the proposed bonus issue of warrants would entail the issuance of up to 330 million warrants,” it said.
The company said the share placement was targeted to increase shareholders, hoping a larger shareholder base will improve trading liquidity of the stock.
The private placement and bonus issue were originally due for completion in the fourth quarter of this year.

This article first appeared in The Edge Financial Daily, on November 20, 2013.