KUALA LUMPUR (July 9): Steel manufacturer Ann Joo Resources Bhd (KL:ANNJOO) is making a cash call to raise working capital and fund its business expansion and project expenditure.

It has proposed to undertake a rights issue of up to 157.66 million new shares, coupled with up to 157.66 million free detachable warrants, to entitled shareholders. This exercise aims to raise up to RM105 million under the minimum scenario and up to RM165.55 million under the maximum scenario.

Under the rights issue, one new share will be offered for every four shares held, with each rights share coming with one free warrant, according to the company’s filing with the stock exchange on Tuesday.

The entitlement date for the exercise will be determined at a later date, but the assumed price is RM1.05, which represents a discount of 15.4% from the theoretical ex-rights price (TRP) of Ann Joo shares, which is RM1.24.

Meanwhile, the exercise price of the warrants is assumed to be RM1.24, which is equivalent to the TRP of Ann Joo shares calculated based on the five-day volume-weighted average price of RM1.2895 up to June 21.

Out of the assumed gross proceeds of RM165.55 million, about RM114.45 million will be designated for working capital, while RM50 million will be used to fund expansions in both the upstream and downstream sectors of the company's steel business, expansion in green technology division as well as investments in environmental, social and governance initiatives and decarbonisation effort.

The remaining RM1.1 million will cover estimated expenses related to the proposed rights issue with warrants.

Ann Joo, which has not undertaken any fundraising exercises in the past 12 months, said the rights issue with warrants is expected to be completed in the fourth quarter of 2024.

As at end-March, the company had cash and bank balances of RM82.21 million. Short-term loans and borrowings amounted to RM1.29 billion while long-term loans and borrowings stood at RM156.53 million.

Shares of Ann Joo closed down two sen or 1.47% at RM1.34 on Tuesday, giving it a market capitalisation of RM775.3 million.