Aeon Credit makes a cash call to raise RM432mil

AEON Credit’s commitment is to put its customers first by establishing itself as a leading brand in consumer finance and service industry.

KUALA LUMPUR: Aeon Credit Service (M) Bhd is seeking to raise RM432mil through a proposed rights issue to improve its capital adequacy ratio and financial flexibility.

The easy payment and personal financing scheme provider told Bursa Malaysia that the proposed rights issue would be undertaken following a proposed 1-for-2 bonus issue at an issue price of 50 sen each.

The proposed rights issue of the three-year irredeemable convertible unsecured loan stocks (Iculs) is, however, not conditional on the proposed bonus issue.

It involves issuing 432 million Iculs at 100% of its nominal value of RM1 each in cash based on 2 Iculs for each Aeon Credit share held.

If the proposed bonus issue is not completed for whatever reason, the company will still undertake the proposed rights issue but on the basis of three Iculs for each Aeon Credit share held.

The coupon rate for the ICULS will be a minimum of 3.5% per annum, payable on an annual basis. The ICULS conversion price will be fixed at a later date.

Aeon Credit, which is a subsidiary of Tokyo-listed credit card issuer AEON Financial Service Co Ltd, said the proposed bonus issue would boost the company’s share capital to a level which would better reflect its current scale of operations of ACSM and facilitate possible equity-linked fundraising exercises in the future through this larger share capital base.

The proposed rights issue, meanwhile, will help it build up an adequate level of capital buffer in anticipation of meeting sufficient capital requirements for the company’s business activities and to support continuous business growth.

It will also improve Aeon Credit’s liquidity and financial flexibility by strengthening its financial position.

Of the expected RM432mil gross proceeds, RM155mil would be set aside to partially repay bank borrowings, which now total RM5.26bil, and RM272.4mil would be for working capital, it said.

Aeon Credit expects the proposals to be completed during the third quarter of this year.