KUALA LUMPUR (Dec 6): Boustead Heavy Industries Corp Bhd (BHIC) has proposed to undertake a partial debt settlement with three banks totalling RM183.26 million and the full settlement of its RM234 million debt with Boustead Holdings Bhd (BHB).

Payment will be made by the cut-off date of Dec 31 that was agreed to by the parties, BHIC told Bursa Malaysia on Wednesday.

It said the partial debt settlement with the banks — Affin Bank Bhd, MBSB Bank Bhd and AmBank Islamic Bhd — will be made through a combination of cash and the issuance of new ordinary shares and “Class A” redeemable convertible preference shares, both conventional (RCPS A) and Islamic (RCPS-i A), at a price of 57 sen per share.

Meanwhile, the RM234 million debt with BHB will be settled through the issuance of new BHIC shares, “Class B” redeemable convertible preference shares (RCPS B) and “Class C” redeemable preference shares (RPS C), also at 57 sen per share.

“No cash proceeds will be raised from the proposed debt settlement with lenders as it is undertaken to partially settle the outstanding financing facilities as at the cut-off date owing by BHIC to the lenders.

“Further, no proceeds will be raised by the company upon conversion of the RCPS A and RCPS-i A into new BHIC shares.

“For avoidance of doubt, the proposed MBSB settlement and proposed AmIslamic settlement, and the issuance of the RCPS A-i to MBSB and AmIslamic shall be done in a shariah-compliant manner,” said BHIC.

As at Nov 30, BHIC had financing facilities of RM187.6 million which were taken mainly for working capital purposes.

The group's shareholders’ funds stood at RM53.5 million after taking into account its accumulated losses of RM195 million, based on the unaudited financial results of BHIC for the period ended Sept 30, 2023. BHIC also recorded a net cash and cash equivalents position of negative RM16.1 million.

Shares in BHIC finished unchanged at 55 sen, giving the group a market capitalisation of RM136.65 million. Year to date, the stock has surged 44.74%.