Tropicana Corporation Bhd (TCB) has proposed to settle advances amounting to RM180 million owing to its group executive vice chairman Tan Sri Tan Chee Sin by issuing 137.68 million new TCB shares at an issue price of RM1.3074 each.
The property group said its board is of the opinion that the proposed capitalisation of the advances is “an appropriate and reasonable option” after considering the group’s financial position.
TCB posted a wider net loss of RM435.59 million for the financial year ended Dec 31, 2022, compared with a net loss of RM52.17 million in the preceding year.
In a filing with Bursa Malaysia today, TCB said the proposed exercise would enable it to settle the indebtedness without incurring additional debt obligation/ interest expenses and to repay the amount owing to Tan without incurring significant cash outflow, thus allowing the group to preserve its cash and bank balances for other purposes.
“(It would also) further strengthen the company’s equity base as well as net assets and gearing ratio of the group through the increase in the issued share capital of TCB,” it added.
TCB said the 137.68 million settlement shares to be issued to Tan’s wholly-owned company, T Shares 1 Sdn Bhd, represents 6.1 per cent of the total enlarged number of 2.26 million issued TCB shares after the proposed capitalisation.
According to TCB, Tan has provided various advances to the group amounting to about RM251.19 million in aggregate since March 2022.
“The advances are interest-free, unsecured and repayable on mutual agreement by Tan and the company. There is no written or fixed repayment schedule for the advances,” it noted.
TCB said the balance of the advances amounting to about RM71.19 million will remain interest-free, unsecured and repayable on mutual agreement by Tan and the company.
