Careplus grants Macquarie Bank right to subscribe up to 16.59% stake via placement

KUALA LUMPUR (March 30): Careplus Group Bhd said the group inked a share subscription agreement with Macquarie Bank Ltd to grant the Australian bank the right to subscribe to four tranches comprising 28.5 million placement shares each.

The glove maker, Careplus said in the filing with Bursa Malaysia that the Aussie bank will have the right to subscribe up to 114 million under a private placement exercise.

This is the second share subscription agreement that Macquarie Bank, a unit of Macquarie Group Ltd, has signed this month. On March 16, Pertama Digital Bhd announced that it entered into a subscription agreement with Macquarie Bank to facilitate its share placement, as this would allow the company to raise funds expeditiously notwithstanding its status as an affected listed issuer.

Notably, in 2021, Borneo Oil Bhd had also inked a similar subscription agreement with Macquarie Bank for the bank to subscribe to 1.2 billion new shares in the listed company at 2.5 sen per placement share — constituting 15.9% of the group's enlarged issued share capital.

Regarding Careplus share placement, the subscription price is to be equal to 94% of the volume weight average price of Careplus shares during the five preceding trading days of the subscription notice. The floor price is fixed at 40 sen, nine sen higher against Thursday's closing of 31 sen.

The subscription period will run for one year from Thursday (March 30).

Against the floor price, Careplus is expected to raise RM45.6 million from the private placement of 114 million shares. The amount to be raised is equivalent to about 26% of its market capitalisation of RM174.77 million.

Based on an enlarged share base of 687.02 million shares, Macquarie will have a 16.59% stake in Careplus if it subscribes to all 114 million shares.

With the enlarged share base, Careplus' current largest shareholder, chief executive officer Lim Kwee Shyan, would have a 13.55% direct stake and 4.29% indirect stake, totalling 122.66 million shares or a 17.84% deemed interest.

Careplus said the private placement of up to 114.6 million new shares — 20% of its share base of 573.02 million — was approved by its shareholders at an extraordinary general meeting (EGM) on March 9.

According to its circular for the EGM, based on the issuance of 114.6 million shares at an indicative price of 40 sen, Careplus would utilise an estimated RM30.34 million (66.17%) of the proceeds to fund the expansion of its glove manufacturing segment, followed by RM15 million (32.72%) for working capital and RM500,000 (1.09%) for the estimated expenses of the exercise.

Falling off its Covid-19 pandemic highs, Careplus reported its fifth straight quarter of losses with a wider net loss of RM18.94 million for the third quarter ended Sept 30, 2022 (3QFY2022) versus RM15.96 million a year earlier, due to low average selling prices and sales as a result of acute oversupply and margin compression.

Loss per share expanded to 3.32 sen from 2.81 sen previously. Revenue for the quarter dropped 58.21% to RM45.53 million from RM109.1 million

As at end-December 2022, the group’s cash balance stood at RM24.1 million. Short-term borrowings were at RM20.68 million, while long-term borrowings stood at RM39.96 million.