UMW shares tumble after rights issue

KUALA LUMPUR: Shares in UMW Holdings Bhd fell 7% in early trade Wednesday after it announced its RM1.1bil rights offer.

UMW was the top losers on Bursa Malaysia, falling 49 sen, or 7.55% to RM6.

UMW-C2 shed seven sen, or 41.18% to 10 sen and UMW-C3 fell 6.5 sen, or 34.21% to 12.5 sen.

UMW has proposed to undertake a renounceable rights issue to raise up to RM1.1bil to finance its proposed takeover of MBM Resources Bhd and an additional stake in Perusahaan Otomobil Kedua Sdn Bhd (Perodua).

UMW said the entitlement basis for the proposed rights issue and the issue price for the rights shares would only be fixed at a later date.

It said the exercise was intended to raise gross proceeds of up to RM1.1bil as the necessary funds primarily to repay a bridging facility to finance both the acquisition of a 50.07% stake in MBM, and the resultant mandatory takeover offer for all the remaining MBM shares not already owned by UMW.

Stock on the Move , UMW