By RUPINDER SINGH

SC Estate Builder Bhd (SCBuild) is planning a rights issue to raise gross proceeds of approximately RM10.74 million. 

The company intends to issue 2.15 billion rights shares at an issue price of 0.5 sen half a sen per rights share. 

The rights shares will be offered to existing shareholders on the basis of two rights shares for every one SCBuild share held.

The issue price of 0.5 sen per rights share represents a discount of 70.3% to the theoretical ex-rights price (TERP) of 1.68 sen  based on the 5-day volume weighted average price of SCBuild shares preceding the announcement.

The rights shares, upon allotment and issuance, will rank equally with the existing SCBuild shares in all respects, except they will not be entitled to any dividends, rights, allotments, or other forms of distribution declared before the allotment date.

The substantial shareholders of SCBuild, including Takzim Empayar Sdn Bhd, Loh Boon Ginn, and SC Estate World Sdn Bhd, have provided irrevocable and unconditional undertakings to subscribe in full for their entitlement of rights shares and any excess shares available.

The proposed rights issue’s proceeds will be used for working capital purposes, including payment to subcontractors and suppliers for building materials and operating/administrative expenses. The estimated expenses for the rights issue itself amount to RM500,000.

In addition to the rights issue, SCBuild also plans to establish and implement a long-term incentive plan (LTIP) for eligible directors and employees of the company and its non-dormant subsidiaries. 

The LTIP will consist of a share grant plan (SGP) and a share option plan (SOP) and will allow eligible individuals to have equity participation in the company and align their interests with the corporate goals of the SCBuild group. 

The LTIP aims to reward and motivate eligible persons, attract skilled individuals, and foster a sense of dedication and ownership within the company.

Barring any unforeseen circumstances, the proposals are expected to be completed by the fourth quarter of 2023.

The group’s main focus is on construction activities, including project management, designing, building affordable housing, and procuring materials and labor. 

The group plans to secure new contracts through open tenders and joint ventures to expand their order book.

Additionally, the group is exploring opportunities for acquisitions in construction-related industries and potential ventures in property development, industrialised building systems, and solar power generation. 

Its board is cautiously optimistic about the group’s long-term prospects, considering the economy and industry outlook.

SCBuild shares remained unchanged at 4.5 sen today, while its market capitalisation stood at RM48 million