Southern Cable plans bonus issue of warrants to fund working capital

SOUTHERN Cable Group Bhd plans to undertake a proposed bonus issue of warrants, on the basis of one warrant for every two existing ordinary shares held in the company.

Southern Cable said in a statement yesterday that the proposal entails the issuance of 400 million five-year warrants, with an option for holders to exercise one warrant into one new ordinary share of the cable and wire manufacturer. 

“We are preparing the necessary resources that will enable us to capture the optimistic outlook in the near term, in line with our operations requirements and business development strategies.

“The working capital would also aid in fulfilling our total orders in hand exceeding RM800 million, which includes the recently-secured RM294 million supply contract from Tenaga Nasional Bhd,” Southern Cable MD Tung Eng Hi said in the same statement.

The group expects to raise up to RM117.7 million in gross proceeds to be utilised as working capital requirements. Its share capital would increase up to RM335.3 million from RM217.7 million previously.

“Our growth aspirations necessitate this corporate exercise, as the majority of funds raised will go towards supporting increased working capital requirements.

“It would also provide shareholders an opportunity to increase their equity participation in our expanding company,” Tung said further.

The company is expected to hold an extraordinary general meeting on the matter, following which the entitlement date of the warrants and the actual exercise price would be determined at a later date. – TMR / pic source: southerncable.com.my

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