JAKS Resources Berhad (“JAKS”) has successfully completed its Renounceable Rights Issue of approximately 1.08 billion new ordinary shares in JAKS (“Rights Shares”), together with approximately 0.54 billion free detachable warrants in JAKS (“Warrants”). Both Rights Shares and Warrants are listed on the Main Market of Bursa Malaysia today.
Over-subscribed by almost 30 percent, the exercise raised approximately RM237.6 million, making it the country’s largest underwritten rights issue of 2020.
The enlarged share capital of JAKS following the rights issue amounts to approximately RM925 million represented by approximately 1,755 million shares. If all Warrants issued (excluding other existing convertible securities in JAKS in issue) are exercised, the enlarged share capital will amount to approximately RM1,190 million and the total enlarged number of shares will be approximately 2,295 million shares.
“As the principal adviser, managing underwriter and joint underwriter of this landmark exercise of the year, we are pleased that we were able to smoothly complete it, including a successful syndication of an underwriting of RM150 million, despite these challenging times amidst the Covid-19 pandemic”, said Chay Wai Leong, Group Managing Director, Kenanga Investment Bank Berhad.
“Rights issues is one of the fastest and cost-efficient methods of fund raising for public listed companies and is a popular option. With the recent announcement by the capital market regulators of a temporary relief measure to allow an expedited process for rights issues, we expect to see an increased in appetite from listed companies to undertake this route to fast-track their fund-raising needs,” Chay added.
The net proceeds raised from the rights issue of JAKS will be utilised for the subscription of additional 30 million JAKS Pacific Power Limited shares in relation to its power plant project, future business projects or investments, partial repayment of borrowings, preliminary expenses in relation to venture into new construction projects in Vietnam and working capital requirements.
Majority of the proceeds which amounts to RM128.40 million has been earmarked and will be utilised for the said subscription of an additional 30 million JAKS Pacific Power Limited shares for US$30 million.
“As it has been a difficult year for everyone due to the prolonged pandemic, establishing mutual relationship is an important element of a successful institution. We will strive hard to reward our shareholders and look forward to working with Kenanga again in future,” said Andy Ang Lam Poah, chief executive officer of JAKS.