Reach Energy to undertakeRM206.51mil debt via issuance of 1.03 billion new shares


KUALA LUMPUR: Reach Energy Bhd (REB) has proposed to issue 1.03 billion new ordinary shares at an issue price of 20 sen per share to undertake a debt settlement exercise involving RM206.51 million owed to Super Racer Limited (SRL).

At the same time, SRL and Cheung Siu Fai, acting in concert with SRL, intend to seek an exemption from the Securities Commission Malaysia from the obligation to undertake a mandatory take-over offer for the remaining REB shares and the outstanding warrants issued by REB expiring on Aug 15, 2022 on completion of the proposed debt settlement.

In a filing with Bursa Malaysia today, REB said on completion of the proposed debt settlement, SRL will enter into a shareholder loan facility agreement, or procure that Cheung enters into a shareholder loan facility agreement (either by himself or jointly with SRL), to make available a shareholder’s loan facility of up to RM22.01 million to REB.

The filing said RM19.51 million from the proceeds from the shareholder’s loan facility are to be used as working capital and RM2.5 million as estimated expenses relating to the proposal.

"The proposed debt settlement is expected to substantially reduce REB’s interest servicing obligation, and subsequently, to alleviate the financial burden of the group," the Bursa filing said, adding that the proposals are expected to be completed by the second half of 2022. - Bernama

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