KUALA LUMPUR (March 30): Practice Note 17 (PN17) firm Iqzan Holdings Bhd has revised parts of the regularisation plan it announced on March 13, besides coming out with an additional share consolidation proposal.
The plan announced earlier included capital reduction, debt capitalisation, rights issue with warrants and private placement.
In a bourse filing on Thursday (March 30), Iqzan said the proposed share consolidation entails the consolidation of every five Iqzan shares into one consolidated share.
“For illustration, based on the company’s issued share capital [of 221.84 million shares as at March 20], the proposed share consolidation will result in 221.84 million shares to be consolidated into 44.37 million consolidated shares,” the group said.
Iqzan said the share consolidation will form part of the group’s capital management plan to improve the company’s capital structure.
“The proposed share consolidation, albeit will result in a lower number of shares in issuance, is expected to increase the overall price range of the shares with the objective of stabilising large percentage movements as a result of small fluctuations in share prices.
“As a result, the volatility in the trading price of shares is expected to be reduced,” the group said.
Iqzan has maintained the proposed capital reduction, entailing the reduction and cancellation of RM80 million, which will be utilised to eliminate its accumulated losses with the balance credited to the retained earnings.
As for the proposed debt capitalisation, it now involves the issuance of 69.08 million capitalised shares and 6.8 million irredeemable convertible preference shares (ICPS) for the capitalisation of debts owed by Iqzan to its creditors, amounting to RM14.5 million.
Iqzan said its board has fixed the issue price at 20 sen per capitalised share, while the issue price for ICPS is 10 sen.
“Upon completion of the proposed debt capitalisation, a total amounting to approximately RM14.5 million owing to the creditors by Iqzan shall be repaid via the issuance of capitalised shares and ICPS and upon issuance, Iqzan shall be released from its debt obligations to the creditors in respect thereof,” the group said.
Iqzan said the debt capitalisation will improve the financial position of the group and place it on a stronger financial footing and working capital position by reducing its liabilities, increasing its shareholders’ fund and net assets, reducing gearing, conserving cash and improving liquidity.
As for the proposed rights issue, it now involves the issuance of 113.45 million rights shares together with 56.72 million free warrants which is to be implemented on a renounceable basis of one rights share for every existing share held by its shareholders held together with 1 free warrant for every 2 rights shares subscribed.
The actual number of rights shares and warrants will be determined later.
The proposed private placement, meanwhile, will now entail the issuance of up to 68.07 million shares representing about 30% of the enlarged share capital of Iqzan at an issue price which will also be determined and announced later.
The maximum number of shares of 68.07 million was arrived after considering the existing share capital of Iqzan at March 20 of approximately RM22.73 million comprising 226.89 million shares, assuming all preceding proposals were completed.
The placements may be implemented in multiple trenches within six months from the approval of Bursa Securities, the group said.
Iqzan said it had not undertaken any equity fund-raising exercises in the past 12 months before announcing the proposed regularisation plans. The group expects to complete its regularisation by 4QFY2023.
On Nov 6, 2019, Iqzan was classified as a PN17 issuer under Bursa Malaysia's Main Market Listing Requirements, after the auditors had expressed adverse or disclaimer opinion in the group's audited financial statements for the 18-month period ended June 30, 2019.
Iqzan's share price closed unchanged at three sen on Thursday (March 30), giving the group a market capitalisation of RM6.66 million.