PETALING JAYA: Kronologi Asia Bhd
(KAB) is proposing to undertake separate bonus issues of shares and warrants, in conjunction with its acquisition of the remaining 83.33% in Quantum China Ltd (QCL) from Lavender Blooms Investments Ltd (LBI).
The acquisition was announced back in May 2021, with a purchase consideration of RM150mil to be met via a combination of a cash payment of RM75mil and the issuance of up to 110.3 million new ordinary shares in KAB priced at 68 sen each.
Pursuant to the deal, the data solutions provider is required to make the third payment tranche of RM13.6mil, to be fully satisfied with the allotment and issuance of 20 million KAB shares to LBI at the aforementioned issue price.
This is premised upon QCL achieving the profit warranty for 2023 of US$2.5mil (RM11mil), based on the consolidated audited accounts of QCL and its subsidiaries for fiscal year ended Jan 31 2023, which are expected to be completed prior to the implementation of the proposed bonus issues.
In a filing with Bursa Malaysia yesterday, KAB said as at the latest practicable date of May 21 2021, the issued share capital of KAB is RM333mil, comprising 720.3 million KAB shares, and upon completion of the third payment, the issued share capital of KAB will increase to RM346.6mil, comprising 740.3 million KAB shares.
The proposed bonus share issue would entail the issuance of up to 148 million bonus shares on the basis of one bonus share for every five existing KAB shares held on an entitlement date, which will be determined and announced at a later date after all the relevant approvals for the proposal has been obtained.
The proposed bonus share issue will increase the total issued shares in the company to 888.4 million.
At the same time, the proposed bonus issue of warrants will entail an issuance of up to 148 million warrants, on the same basis of one warrant for every five existing KAB shares held by entitled shareholders on the entitlement date.
The exercise price of the warrants is to be determined by KAB’s board of directors at a later date, after the receipt of all relevant approvals but before the announcement of the entitlement date.
The group said the proposed bonus warrants issue of warrants will not raise any immediate funds as the warrants will be issued at no cost to entitled shareholders.
“The amount of proceeds to be raised from the exercise of the warrants would depend on the actual number of warrants exercised during the exercise period. As such, the exact quantum and time frame for utilisation of the proceeds to be raised cannot be determined at this juncture,” it said in its exchange filing.
Assuming that all warrants are exercised at the exercise price of 52 sen each, KAB expects to raise gross proceeds of up to RM77mil, and that any proceeds to be raised from the exercise of the warrants will be utilised by KAB within 12 months after the receipt of the proceeds.
KAB said: “The proceeds received are expected to be used for the group’s working capital requirements to support the group’s ongoing business operations.
The allocation of the proceeds towards the working capital components will depend on the group’s operating requirements at the particular point in time, and such allocation shall be determined at the board’s discretion at a later date.”
Before the proceeds are utilised, they will be placed as deposits with financial institutions or short-term money market instruments, and any interest income earned therefrom will be used for the group’s working capital, with the details and breakdown yet to be determined at this juncture, it added.
