BURSA Malaysia’s Main Market-listed G Capital Bhd (GCAP) has announced a proposal to undertake a renounceable rights issue which entails the issuance of up to RM112.88 mil nominal value of 1.41 billion five-year 8.0% redeemable convertible unsecured loan stocks (RCULS) at a nominal value of 8 sen each.
The exercise will be executed on the basis of four RCULS for every one existing ordinary share in GCAP held on an entitlement date to be determined later.
It will raise at least RM17.21 mil to a maximum subscription level of RM112.88 mill. On its part, GCAP promises to pay quarterly coupons which amount to 8% p.a. throughout the five-year RCULS tenure.
A filing with Bursa Malaysia today shows that during the five-year tenure, RCULS holder may trade the RCULS on Bursa Malaysia, convert them into new GCAP shares by surrendering one RCULS with cash at conversion price (up to 20% premium from price fixing to be determined later) or to wait for non-cash conversion option at the end of maturity and enjoy fixed return along the period.
The proceeds arising from the proposed rights issue are intended to part-finance GCAP’s project costs and working capital requirements.
Under the maximum subscription scenario, the RM112.88 mil raised will be utilised to part-finance the group’s 20MW mini-hydropower plant projects in Perak, namely Sungai Perak Salu (10MW), Sungai Temelong & Sungai Ibul (8MW) and Sungai Geroh (2MW).
“We are marching towards getting a financial close to commence the construction of the mini-hydropower plant projects,” commented GCAP’s executive director Datuk Yap Yee Ping.
“Upon reaching commercial operation dates, we are expecting these plants to generate revenue of RM653.62 mil for the 21-year renewable energy power purchase agreement (REPPA) signed with Tenaga Nasional Bhd.”
Added Yap: “We believe the proposed rights issue is attractive and appealing to our fellow shareholders to participate and be rewarded with fixed interest income whilst witnessing GCAP Group’s growth trajectory.”
She contended that any RCULS conversion before the end of maturity is a vote of confidence to make the world better by embracing green energy.
“Such proceeds will be additional resources for the GCAP group towards covering future working capital requirements and/or project costs, including our 26MW project mini-hydropower plants in Pahang where the Sustainable Energy Development Authority Malaysia (SEDA) has granted its Feed-In Approval on Dec 6 last year,” asserted Yap.
“While GCAP has the option for RCULS redemption, we would like to reward RCULS holders by offering non-cash conversion rights at maturity. We believe our shareholders will welcome this proposed rights issue.”
At the close of today’s trading, GCAP was down 1 sen or 2.27% to 43 sen with 21,000 shares traded, thus valuing the company at RM138 mil. – April 5, 2023