KUALA LUMPUR: Shares of JAKS Resources fell on Wednesday after it proposed another cash call to raise up to RM160.92mil while it was downgraded by Public Invest Research to underperform.
Its share price fell 13.5 sen to 89.5 sen while its warrants, WB skidded 15.5 sen to 61 sen.
The FBM KLCI was up 18.25 points or 1.27% to 1,455.01. Turnover was 2.41 billion shares valued at RM1.58bil. Gainers beat losers 535 to 269 and 338 counters unchanged.
The company proposed another cash call via a renounceable rights issue of new ordinary shares together with free detachable warrants to raise proceeds of up to RM160.92mil.
Public Invest Research said JAKS intends to raise minimum gross proceeds of RM130mil with its major shareholder, namely Ang Lam Poah taking up to RM50mil worth, and the remaining RM80mil to be taken by underwriters to be identified later to achieve minimum subscription of RM130mil.
To recap, its previous cash call back in 2018 was undersubscribed by 62.48%.
“As highlighted earlier, we are negative on any proposed cash call as it is highly dilutive (net asset to be diluted by c.33%).
“We are also surprised by the quantum raised (RM130mil) for its equity commitment in the Vietnam Power Plant as it still has outstanding construction works (RM338mil outstanding orderbook) projected to yield c.RM68mil in net profits.
“All told, we downgrade our call to Underperform with TP lowered to 77 sen (c.60% discount to RNAV) on potential dilution from the cash call, ” Public Invest Research said.
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