XOX’s rights issue with warrants undersubscribed

KUALA LUMPUR: Mobile virtual network operator XOX Bhd’s renounceable rights issue of shares together with free warrants was undersubscribed by 43.71%..

In a filing with Bursa Malaysia, the company said valid acceptances and valid excess applications received at the close of acceptance on Feb 4 totalled 200.41 million rights shares with warrants, representing 56.29% of the securities available.

“Notwithstanding the above and the undersubscription for the rights issue of shares with warrants, the minimum subscription level of 35.6 million rights shares together with 35.6 million warrants has been achieved,” said the telecommunication services provider.

As the rights shares with warrants have not been fully subscribed for, the XOX board has decided to allot the rights shares with warrants to all applicants who have applied for the excess rights shares with warrants.

Last month XOX priced its rights issue (of up to 356 million shares) at double the indicative price mentioned in its circular to shareholders last year. 

The company fixed the issue price of the rights shares at 20 sen each on Jan 4, a 2.25% discount to the theoretical ex-rights price (TERP) of XOX shares based on the five-day volume weighted average price up to Dec 31, 2015. The free detachable warrant has an exercise price of 20 sen.

In its circular to shareholders dated March 6, 2015, XOX had given the indicative issue price of 10 sen per rights share or a discount of 18.9% from the TERP. Under the maximum scenario, that would have generated RM35.6mil in proceeds.

The rights issue is part of a corporate exercise first announced in October 2014 that has already seen the completion of a proposed capital reduction and a proposed restricted share issue.

The ACE Market company has received three unusual market activity (UMA) queries from Bursa Securities since the circular on the corporate exercise was despatched. The first two, in October 2015, were regarding a share price surge and the last was a sharp price fall in November 2015. On each occasion, no explanation could be found for the UMA.

The price quadrupled within seven weeks last year to hit 68.5 sen on Nov 19 and thereafter it plunged by almost half to 30.5 sen on Dec 1.

On Wednesday, XOX shares closed at 19 sen, half a sen lower, with 15.787 million shares traded.