KUALA LUMPUR: Convenience store operator 7-Eleven Malaysia Holdings Bhd
has scrapped its proposed renounceable rights issue of up to 616.69 million new warrants which would have enabled it to raise a minimum of RM25.34mil.
It said on Thursday it had decided not to proceed “after taking into consideration general feedback as well as market reaction to the proposed rights issue”.
7-Eleven said the aborting of the corporate exercise would not have any material effect on the group's earnings and net assets.
Recall that on April 25, the company announced the rights issue of up to 616.69 million new warrants at an issue price of 10 sen per warrant. This would be on the basis of one warrant for every two shares held.
Based on the issue price of 10 sen per warrant and the exercise price of RM1 per warrant, the theoretical fair value of the warrants was about 73 sen per warrant.
The issue price of 10 sen per warrant would be a discount of 86% from the theoretical fair value of the warrants. This would have seen it raising between RM25.34mil and RM61.67mil.
7-Eleven had planned to use the proceeds to finance the working capital requirements including but not limited to payments to suppliers and operating expenses such as rental, store utilities, insurance, store maintenance and royalties payable.
Its share price closed up two sen to RM1.33.
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