PETALING JAYA: Ni Hsin Resources Bhd is looking to raise between RM3mil and RM9.6mil through a rights issue of redeemable convertible preference shares (RCPS) and diversify into the food and beverage (F&B) business.
In a filing with Bursa Malaysia, the company said it had proposed a renounceable rights issue of up to 960,100,350 RCPS at an issue price of one sen per share on the basis of two RCPS for every one existing ordinary share in Ni Hsin.
Prior to the company’s annoucement, Ni Hsin had 321,754,710 shares, including 10,216,536 treasury shares and 158,295,465 outstanding warrants 2019/2022, which are exercisable into 158,295,465 shares.
“The proposed rights issue of RCPS is intended to be undertaken on a minimum subscription basis, which will entail the issuance of 300,000,000 RCPS.
“To meet the minimum subscription level, Ni Hsin has obtained an irrevocable written undertaking from Khoo Chee Kong, the major shareholder of Ni Hsin, to subscribe and/or procure the subscription of 300,000,000 RCPS, ” it added.
Khoo will also spearhead the new proposed F&B business.
From the RM9.6mil raised, Ni Hsin intends to utilise RM5.5mil to set up a production line for its new F&B products.
It will also utilise up to RM3.6mil of the proceeds for the working capital requirements of its day-to-day operations.
Ni Hsin’s cookware and clad metals business had incurred losses for the financial year ended Dec 31,2018 (FY18) and FY19 as a result of competition from overseas competitors, global market conditions and the ongoing US-China trade war, which has impacted global business sentiments.
On the proposed diversification, the company said its venture into the F&B business would allow a “revenue-generating business” to mitigate the risk of over-dependence on its existing businesses.