KUALA LUMPUR (April 28): Practice Note 17 (PN17) company Barakah Offshore Petroleum Bhd has proposed to undertake a renounceable rights issue of new shares with free warrants to raise up to RM40 million as part of its regularisation plan.
The group has earmarked proceeds received from the proposed exercise to fund the Pan Malaysia maintenance, construction and modification contract for 2018 to 2023 for Jadestone Energy (PM) Inc, future projects and for working capital.
The oil and gas service provider is also proposing a capital reduction of RM197.7 million to reduce the share capital and accumulated losses of the company.
Additionally, it plans to establish an employees’ shares scheme of up to 15% of the group's issued share capital for directors and employees of Barakah and its subsidiaries.
In a filing with Bursa Malaysia on Thursday (April 28), Barakah said the issue price of the rights shares will be determined by the board of directors at a later stage.
"It is the intention of the board to fix the issue price at a discount of between 20% and 40% based on the price of Barakah shares immediately preceding the price-fixing date," it added.
Assuming an entitlement basis of two rights shares for every one existing Barakah share at an issue price of two sen per rights share, the proposed rights issue with warrants will raise between RM6 million and RM40 million.
Barakah said it has procured written undertakings from Barakah group president and chief executive officer Datuk Seri Nik Hamdan Daud and his son Nik Azri Syazwi Nik Hamdam, who hold a combined 10.3% stake in the company, to subscribe in full for their entitlements under the proposed exercise.
The group expects to complete the implementation of the proposed regularisation plan within 12 months from the date of approval of Bursa Securities.
Malacca Securities Sdn Bhd has been appointed as the principal adviser for the proposed regularisation plan.
Barakah slipped into PN17 status in May 2019 after its shareholders’ equity fell below 25% of its issued share capital and less than RM40 million based on the unaudited interim financial results for the financial year ended Dec 31, 2018 (FY18).
Its external auditor Messrs Crowe Malaysia had also expressed a material uncertainty related to the going concern of Barakah in its audited FY17 financial statements.
Shares in Barakah ended unchanged at five sen on Thursday, giving it a market capitalisation of RM50.15 million.
Source: TheEdge - 29 Apr 2022
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