KUALA LUMPUR (March 6): Euro Holdings Bhd (KL:EURO) has proposed a slew of corporate exercises, which will see its former group managing director and major shareholder Datuk Seri Steven Lim Teck Boon’s stake expanding to 46.99%, from 38.45% currently.

The exercises comprise a proposed RM56 million property deal, a RM25.34 million debt settlement arrangement, a private placement of 331.99 million shares (25% of its share base), and a one-for-one rights issue, according to the furniture maker’s bourse filing on Thursday.

Euro Holdings said it plans to acquire industrial land from Lim’s wholly owned Supreme Power Auto Sdn Bhd for RM56 million — to be satisfied via RM38 million cash and the issuance of 400 million shares in Euro Holdings at 4.5 sen apiece.

Meanwhile, the company plans to settle RM25.34 million in debts owed to Datuk Seri Lim Teck Boon and companies he controls — 99%-owned Imponotive Auto Sdn Bhd, wholly owned Supreme Power Auto and 95.31%-owned Supreme Power Performance (M) Sdn Bhd — via the issuance of 563.21 million new shares at 4.5 sen apiece.

It also proposed a private placement of 331.99 million shares at an issue price to be determined later and a rights issue of 2.62 billion new shares on the basis of one rights share of every one existing share held.

The exercises will see Euro Holdings’ share base expanding to 5.25 billion shares from 1.33 billion shares.

According to Euro Holdings, under the exercises and based on undertakings by Lim and companies linked to him, his total stake in the company will grow to 46.99% — 22.99% held directly, and another 24% via vehicles PH Performance and SPA Furniture — from 38.45% currently. His father, Datuk Lim Chaw Teng, will hold another 9.2% stake directly.

As Teck Boon’s stake, together with persons acting in concert, will exceed 50%, Euro Holdings has proposed an exemption for them from undertaking a mandatory takeover offer for the remaining shares in Euro Holdings.

Based on an indicative price of 4.5 sen, Euro Holdings said the private placement is expected to raise RM14.94 million, which will be used for working capital and repay bank borrowings.

Meanwhile, the company said the rights issue is expected to raise up to RM104.93 million based on an indicative price of four sen, which will be used to pay the cash portion of the consideration for the industrial land, working capital, and capital expenditure.

The proposals are subject to approval from the Securities Commission Malaysia as well as shareholders’ approval at an extraordinary general meeting to be convened. The exercises are expected to be completed by the fourth quarter of 2025.

TA Securities Holdings Bhd was appointed Euro Holdings’ principal adviser for the proposals.

Back in 2023, Euro Holdings undertook a private placement of 264.57 million shares, which represented 30% of its share base at the time to raise RM16.23 million to fund working capital and repayment of bank borrowings.

Shares in Euro Holdings ended half a sen or 10% higher at 5.5 sen, valuing the company at RM73.04 million.

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