PETALING JAYA: Green Packet Bhd has proposed to undertake a renounceable rights issue with warrants in an effort to raise RM52.6mil to expand its solutions and Internet of Things (IoT) business segment through the purchase of trade equipment.
The company’s rights issuance will see it issuing of up to 150,202,583 new shares on the basis of one rights share for every five existing Green Packet share held.
The rights shares will come together with up to 450,607,749 free detachable warrants on the basis of three warrants for every one rights share subscribed to.
“The proposed rights issue with warrants is for us to grow our solutions and IOT segment which we believe is a blue ocean opportunity. We also believe that this is the best option as it is non-dilutive and will provide entitled shareholders with an opportunity to participate in an equity offering in the group which will allow them to share in the prospects, future growth and earnings of the group in the future,” said its group CEO and executive director Tan Kay Yen in a press release.
The company said that the proposed rights issuance with warrants is expected to raise the maximum gross proceeds of up to RM52.6mil based on an indicative issue price of 35 sen per rights share excluding proceeds from the exercise of the warrants.
To inject confidence into this latest planned corporate exercise, Green Packet said its substantial shareholders, Green Packet Holdings Ltd and Puan Chan Cheong, will undertake to subscribe for the rights issue with warrants to meet the minimum level of funds required for the group.
The machines that will be purchased include the customer premise equipment such as optical modems and media devices such as set top boxes and over the top devices, media casting devices and media home gateway IoT devices such as on board diagnostic system ) and tire pressure management solutions.
The company said that it believes this investment in the solutions and IOT business will enable it to be optimally positioned to ride the wave of growth to contribute to the top and bottom line in the years to come.