KUALA LUMPUR (July 14): Healthcare supplies and equipment provider Adventa Bhd plans to raise up to RM45.84 million through a rights issue for business expansion, working capital and to repay bank borrowings. As at July 4, the total borrowings of Adventa Group was RM9.49 million.

In a bourse filing on Friday (July 14), Adventa said it intends to utilise the proceeds of up to RM30 million from the rights issue to fund the group's construction of a manufacturing facility in Indonesia to manufacture disposable medical devices and also purchase of the plant and machinery.

The construction is envisaged to commence in the second half of 2023, and be completed by 2H2024.

The renounceable rights issue entails the issuance of up to 152.79 million new shares in Adventa on the basis of one rights share for every one existing Adventa share held, on an entitlement date to be determined later.

As at July 4, 2023, Adventa has an issued share capital of RM57.68 million, comprising 152.79 million shares.

Based on the illustrative issue price of 30 sen per rights share, the proposed exercise will raise gross proceeds of RM17.71 million under the minimum scenario and RM45.84 million under the maximum scenario, Adventa said. The illustrative issue price of 30 sen per rights share represents a discount ranging from 28.94% to 37.26% to the respective theoretical ex-rights price of Adventa shares.

Adventa said its executive director and substantial shareholder Low Chin Guan has provided his irrevocable and unconditional undertaking to subscribe in full for his rights shares entitlement based on his shareholdings as at the entitlement date to be determined later. Pursuant to his undertaking, Low will subscribe for his entitlement of 59.04 million rights shares, which would cost RM17.71 million based on the illustrative issue price of 30 sen apiece. This will bring his total stake to 55.74%.

Low currently holds 59.04 million shares, equivalent to 38.64% of Adventa's issued shares.

On top of his undertaking, Low has also expressed interest to take up additional rights shares that remain unsubscribed by the entitled shareholders and/or their renouncee(s) under the proposed rights issue, amounting up to 50 million excess rights shares.

As such, Adventa is seeking an exemption to Low and persons acting in concert with him, namely Low Lea Kwan who collectively hold a 42.25% stake, from the obligation to undertake a mandatory takeover offer for all the remaining Adventa shares not already owned by them pursuant to the proposed rights issue.

Barring any unforeseen circumstances, the proposals are expected to be completed in the fourth quarter of 2023.

UOB Kay Hian Securities (M) Sdn Bhd has been appointed as the principal adviser for the proposals.

Adventa shares closed unchanged at 54 sen on Friday, giving it a market capitalisation of RM81.75 million.