Central Global Berhad had proposed the issuance of one-for-two free warrants paired with a private placement exercise of up to 39.24 million new ordinary shares in CGB.
The proposed private placement representing not more than 30% of the enlarged total issued share capital of CGB will exclude any treasury shares. Based on an illustrative price of RM0.85 per Placement Share, the Group intends to raise between RM29.67 million and RM33.36 million which will be used primarily to fund its existing construction projects in Penang specifically the construction of the Montage condominium in Sungai Nibong, the Quinton condominium in Balik Pulau, and the Sri Bayu apartment in Bayan Lepas.
At the same time, the Group says it intends to reward its existing shareholders through the issuance of free warrants.
The proposed free warrants entail the issuance of up to 65.40 million free warrants of the Group on the basis of one warrant for every two existing shares held on an entitlement date to be announced later.
Based on the exercise price of RM0.80 per warrant, the group will be able to raise up to RM52.32 million which will serve as a means for working capital requirements as and when they are exercised.
“We thought long and hard on how best to express our appreciation to our shareholders. This Proposed Free Warrants issuance is a splendid combination of mutual win for the Group and our shareholders. With the Proposed Free Warrants, there will be liquidity and shareholders will be rewarded for staying with us for the long term. Consequently, we hope this will encourage more investors’ participation in the company,” said Chew Hian Tat, Group Managing Director.
“To ensure the sustainability of our business and to further create more long-term value for our shareholders, CGB is actively seeking new opportunities and projects in the construction sector. We are also looking forward to the next stage of our expansion plans for our manufacturing segment which will see an increased total production capacity by 2.5 times to 70 million square metre of tapes per annum from the current 20 million square metre per annum,” he added.
In line with the Group’s plans to grow its manufacturing segment, CGB has placed an order to purchase the machinery and to install a new masking tape coater production lin. The New Line, which is expected to be commissioned by October 2022 and to commence commercial production by January 2023, will be located in the Group’s existing manufacturing facility in Sungai Petani, Kedah, and would occupy approximately 22,755 square feet.
Barring any unforeseen circumstances, the proposals are expected to be completed by the second quarter of 2022.
