Minetech proposes corporate exercises

MINETECH Resources Bhd has proposed corporate exercises to raise proceeds of approximately RM72.9 million to RM98 million.

The corporate exercises encompass a proposed share capital reduction (SCR), proposed private placement, proposed rights issue of irredeemable convertible preference shares (ICPS), proposed amendments to the constitution and proposed share issuance scheme (SIS).

In a statement, the company said the proposed SCR of RM90 million will see the corresponding credit arising from the reduction being used to reduce or eliminate accumulated losses.

The proposed SCR will not result in any adjustment for the market price, however, it enables the company to reward shareholders by dividend policy, it said.

Following the SCR, Minetech has proposed a private placement and ICPS on the basis of one ICPS for every two existing shares.

It said the proceeds of both proposed private placement and ICPS are intended for the development cost of a solar power plant, funding for proposed diversification into oil and gas (O&G) and future business investment and/or acquisitions.

The proceeds would also cover expenditure of construction projects, expansion of the quarry and bituminous products divisions, as well as repayment of borrowings.

Executive chairman Datuk Awang Daud Awang Putera said the proposed corporate exercises will assist the company in improving financial performance in the next financial year.

“At the same time, it will help raise capital for our diversification into renewable energy and O&G, which are viable businesses that continue to see growing demand.

“We believe both industries can potentially contribute 25% or more to our net profit,” he said.

Minetech’s wholly-owned subsidiary, Minetech Construction Sdn Bhd, has registered to be a Registered Solar PV Investor (RPVI) with Sustainable Energy Development Authority Malaysia (SEDA).

“As an RPVI, Minetech Construction will be allowed by SEDA to sell electricity through the renewable power purchase agreement under the net-energy metering programme to government agencies, businesses and individuals,” Awang Daud said.

Meanwhile in the O&G space, Minetech has entered into a memorandum of understanding (MoU) with Hadid Oil & Gas LLP to establish a joint strategic collaboration for potential business opportunities that also covers other industries including construction in Kazakhstan and/or other countries and regions.

The MoU was inked on June 26, 2020.

Minetech added that the proposed SIS will involve the granting of options to eligible directors and employees of the company who meet the eligibility criteria for participation in the proposed scheme. — Bernama