G CAPITAL Bhd (GCAP) has embarked on a rights issue exercise to part-finance project costs in accelerating the completion of its renewable energy projects, notably the solar photovoltaic (PV) energy generating system and mini-hydropower plants projects.
Towards this end, the company has unveiled a renounceable rights issue which entails the issuance of up to RM102.62 mil nominal value of 1.28 billion five-year 5% redeemable convertible unsecured loan stocks (RCULS) at 100% of its nominal value of 8 sen each on the basis of four RCULS for every one existing GCAP share held on the entitlement date.
The proposed rights issue will raise at least RM41.78 mil and RM102.62 mil under the minimum and maximum subscription levels.
“With the diversification mandate from our recent EGM (extraordinary general meeting), we are tuning into full thrust to hasten the completion of solar PV systems and mini-hydropower plants projects,” commented GCAP executive director Tan Sri Dr Ali Hamsa. “The proposed rights issue will gear us well financially for that purpose.”
Out of the RM102.62 mil to be raised under the maximum subscription level, RM28.2 mil are currently earmarked to part-finance project costs of the solar PV systems (9.4MW) while RM469.1 mil is being allocated for mini-hydropower plants (43.2MW) projects.
“After deliberation with the board, we have decided to undertake this proposed rights issue which enables the group to manage its cash flows more efficiently,” noted Ali.
A filing with Bursa Malaysia today shows that the coupon fixed rate of 5% per annum is payable every quarter. The RCULS may be converted into new GCAP shares by surrendering one RCULS together with 82 sen cash.
The rights issue exercise allows participating shareholders to earn interest income from the RCULS while witnessing the growth trajectory of the GCAP group by increasing their stake at a pre-determined conversion price, according to Ali.
“Proceeds from RCULS conversion will be additional resources for GCAP group for future working capital requirement and/or project costs,” he pointed out.
“GCAP shall make redemption at 100% its nominal value of 8 sen each on RCULS outstanding at the maturity date. We believe shareholders will welcome this proposed rights issue.”
Barring any unforeseen circumstances, the management envisaged that some of the Solar PV System projects will start operating by 2H 2021, thus able to contribute to the group’s revenue this year onwards over a span of 25 years.
Meanwhile, the mini-hydropower plants are expected to start contributing to the group’s revenue from the financial year ending Dec 31, 2025 onwards for a span of 21 years from the date of commission of the respective plants.
At the close of today’s trading, GCAP was down 1 sen or 1.32% to 75 sen with 422,800 shares traded, thus valuing the company at RM241 mil. – July 13, 2021
