- Recall that on 17 September, RHB Capital (RHB Cap) announced that the regulators had prohibited Aabar Investments PJS (Aabar) from exercising its voting rights in respect of the shares held in RHB Cap in excess of 15% and RHB Cap is prohibited from issuing any further shares to Aabar in right of the shares which are in excess of 15% (order).

- This is in relation to its proposed 517.7mil rights issue in total, at RM4.82 per rights share on the basis of one (1) rights share for every five (5) existing RHB Cap shares held by the entitled shareholders of RHB Cap. The targeted gross proceeds from the rights is RM2.5bil.

- Further to this, RHB Cap had announced that as a consequence of the order issued by Bank Negara Malaysia, the company had on 5 November entered into a supplemental agreement to the management and underwriting agreement dated 9 September (Management and Underwriting Agreement) with RHB Investment Bank, Affin Hwang Investment Bank Berhad, CIMB Investment Bank Berhad, Credit Suisse Securities (Malaysia) Sdn Bhd, Maybank Investment Bank Berhad and Public Investment Bank Berhad to vary certain terms and conditions contained in the Management and Underwriting Agreement.

- RHB Cap has further clarified that the terms and conditions which were varied under the supplemental agreement to the Management and Underwriting Agreement dated 5 November are largely consequential amendments pursuant to the order issued by Bank Negara Malaysia. The amendments include the extension of certain dates, such as the date of registration of the abridged prospectus with the Securities Commission Malaysia and lodgement of the abridged prospectus with the Registrar of Companies of Malaysia, as well as the date of listing and quotation of the Rights Shares on the Main Market of Bursa Malaysia Securities Berhad.

- The company indicated that theoretically, the total number of rights to be issued will be lowered by the 6% rights portion that Aabar is not allowed to subscribe to. However, if Aabar were to sell its holding to 15%, then the size of the rights issue will not change. Thus, the total number of rights to be issued remains uncertain at this juncture. We maintain HOLD.

Source: AmeSecurities Research - 11 Nov 2015