KUALA LUMPUR: Mitrajaya Holdings Bhd targets to raise up to RM107.09mil through a rights issue, virtually all of which will be used to repay its bank borrowings.
In a filing with Bursa Malaysia, the building and road construction company proposed a 1-for-5 renounceable rights issue of up to 157.48 million shares together with Warrants E and bonus issue on the basis of a warrant and a bonus share for every two rights shares subscribed.
The entitlement date will be determined later.
Mitrajaya said it would seek an undertaking from its major shareholder and group managing director Tan Eng Piow, who owns a 40.91% stake, to subscribe in full for his entitlement under the proposed rights issue.
Based on the indicative issue price of 68 sen per rights share, the company aims to raise between RM93.69mil and RM107.09mil, all of which except the related expenses will be used to pare down the unsecured revolving credit of about RM145.34mil given by financial institutions to Mitrajaya’s unit Pembinaan Mitrajaya Sdn Bhd.
The revolving credit was used for working capital purposes, including payment to sub-contractors and suppliers.
Under the maximum scenario, Mitrajaya said such repayment would result in an annual interest cost saving of about RM4.7mil based on the average interest rate of 4.47% per annum.
The proposed rights issue is expected to be completed by the first quarter of 2018.