KUALA LUMPUR (July 17): Destini Bhd plans to undertake a renounceable rights issue of up to 1.66 billion new shares coupled with free warrants to raise at least RM20.93 million, mostly for its working capital.

According to Destini’s filing, the rights issue entails the issuance of one rights share for every existing share held, while the warrants will be issued on the basis of one warrant for every rights share subscribed for by entitled shareholders, on an entitlement date to be announced.

At an issue price of four sen per rights share — a discount of 40.56% to the theoretical ex-rights price (TERP) of 6.73 sen (calculated based on the five-day volume weighted average market price of 9.45 sen) — Destini is expected to raise RM20.93 million based on the minimum subscription level, whereby only the undertaking shareholders subscribe for their respective rights shares and additional undertaking, while no other entitled shareholders do so.

This minimum subscription level refers to the irrevocable and unconditional undertaking given by Destini’s non-independent and non-executive director Datuk Abd Aziz Sheikh Fadzir, as well as his nominee companies Dayanine Equity Sdn Bhd and Dayatahan Sdn Bhd — vide their letters on Monday (July 17), to subscribe in full for their respective entitlements, which totalled 123.3 million rights shares, and Dayanine's promise to take up another 400 million more rights shares that remain unsubscribed by entitled shareholders.

From the proceeds raised, 84.81% will be allocated for working capital and 11.84% for repayment of bank borrowings; 3.35% will be used to defray the rights issue's expenses.

On completing the proposed rights issue with warrants under the minimum scenario, the collective shareholders of the undertaking shareholders will increase from 7.41% to 29.57%. And on the full exercise of the warrants, their collective shareholdings may further increase to 43.16%.

“Such exercise of the warrants may potentially result in the shareholdings of the undertaking shareholders to collectively exceed 33% controlling threshold in Destini and pursuant to the rules, the undertaking shareholders would in such event be obliged to extend a MGO [mandatory general offer] in Destini,” said the group.

The rights issue is slated to be completed by the fourth quarter of this year.

Destini’s share price, which has risen over 18% year-to-date, finished at 9.5 sen on Monday. This gives the group a market value of RM150.13 million.