CEO Morning Brief

Comintel’s White Knight to Take Up a Smaller Stake Following Regularisation Plan Revision

Publish date: Thu, 02 Jun 2022, 08:41 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (June 1): Comintel Corp Bhd said its white knight will subscribe to a smaller stake of 56.49% in the company from 72.47% envisioned previously, following a proposed revision to the regularisation plan announced by the company.

Comintel, which was planning to place 242.5 million new shares and 70 million redeemable convertible preference shares (RCPS) at 8 sen apiece to raise RM25 million, will see a smaller subscription by JT Conglomerate Sdn Bhd (JTC), controlled by businessman Datuk Tan Kak Seng.

Under a supplemental subscription agreement, JTC will now subscribe to 145 million new shares for RM11.6 million, from 206.13 million shares previously announced, Comintel said in a filing on Wednesday (June 1).

Combined with another 71.06 million Comintel shares that JTC plans to acquire from a group of vendors, JTC’s stake in Comintel will be at 56.49% of its enlarged share capital upon completion of the exercise, from 72.47% previously proposed.

“The proposed revision does not affect the subscription by JTC of 70 million RCPS as per the Subscription Agreement as well as the subscription price of eight sen each for the subscription share and RCPS respectively,” Comintel said.

The remaining 97.5 million new Comintel shares will be taken up by other investors, it said. Based on its prior announcements, this includes Datuk Seri Godwin Tan Pei Poh and Tan Wee Dher, who will each subscribe to 18.19 million shares. Other investors that will take up the remaining placement shares include Yankong Stainless Sdn Bhd (18.74 million), Tan Chyi Boon (15.3 million), Chow Hing Yaung (13.54 million) and Fong Yik Hon (13.54 million).

Where JTC’s shareholding will trigger a mandatory general offer (MGO) of the remaining Comintel shares, Comintel said it has obtained undertaking from other subscribing investors not to accept the MGO, which will be at 15 sen per share.

Aside from the fundraising of RM25 million, Comintel’s regularisation plan also entails a share capital reduction of RM90.96 million to eliminate its accumulated loss, as well as the acceptance of a construction contract worth RM188.77 million from Mightyprop Sdn Bhd.

Comintel fell into PN17 status in March 2019 after its shareholders’ equity fell to under 25% of its issued share capital.

An initial regularisation plan involving Datuk Seri Subramaniam Pillai Sankaran Pillai in 2020 was aborted in April last year, after Comintel said the plan's conditions precedent could not be met.

Shares of Comintel have been suspended from trading since May 31, 2021. The group's shares last settled at nine sen, giving it a market capitalisation of RM13 million.

Source: TheEdge - 2 Jun 2022

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