KUALA LUMPUR (Dec 6): Comintel Corp Bhd, which completed its regularisation plan last year, has proposed a rights issue exercise followed by a private placement to raise approximately RM90 million for acquisition of construction equipment and working capital purposes.

The group is proposing a one-for-10 rights issue of 45.25 million shares at 80 sen apiece to raise RM36.2 million.

It is also proposing the private placement of 45.25 million shares, representing 9.09% of the enlarged share base post-rights issue, to raise approximately RM53.85 million, based on an illustrative placement price of RM1.19 per share.

At its last close of RM1.44, Comintel’s share price has climbed 61% from its August level of 89 sen.

The two exercises will increase its share base by 20% from its current levels of 452.5 million shares.

Some RM35 million of the proceeds from the rights issue will be used to purchase construction equipment, with RM3.58 million going to expenses for the proposals, and the balance for working capital.

The rights issue sees the underwriting by Comintel’s three largest shareholders — JT Conglomerate Sdn Bhd (51.06%), managing director Datuk Jackson Tan (12.15%) and executive director Lee Seng Yong (8.13%).

As for the remaining 28.66% portion, underwriting arrangements and commission “will be in place prior to the implementation of the proposed rights issue”, Comintel said.

After completion of the fund-raising exercises, Comintel also intends to undertake a one-for-one bonus issue of its shares without capitalisation of company reserves.

The group is also proposing a name change to Binastra Corp Bhd — reflecting the branding under Tan for construction projects undertaken by him prior to his emergence as shareholder and MD of Comintel.

The company is also proposing the establishment of an executives’ share option scheme (ESOS) and restricted share grant plant (RSG) of up to 10% of Comintel’s share base in a period of up to 10 years.

Comintel has been profitable since 2022, following the execution of projects, as well as a regularisation plan which raised RM25 million from issuance of 242.5 million ordinary shares and 70 million redeemable convertible preference shares at eight sen apiece.

The regularisation plan also included a share capital reduction of RM90.96 million to eliminate the listed company’s accumulated loss.

For the six months ended July 2023 (1HFY2024), Comintel’s net profit more than tripled to RM14.16 million or 3.7 sen per share, from RM4.61 million or 3.29 sen per share, as revenue similarly tripled to RM151.84 million, from RM49.97 million.