KUALA LUMPUR (Nov 6): Candy maker Khee San Bhd (KL:KHEESAN) on Thursday launched its proposed rights issue which forms part of a regularisation plan to exit Practice Note 17 (PN17) status.
The exercise entails the issuance of up to 960.96 million new shares on the basis of seven shares for every one share held, together with up to 549.12 million free detachable warrants on the basis of four warrants for every seven rights shares subscribed, at an issue price of 10 sen per share, said the company in a statement.
The entitlement date for the rights issue has been set for Nov 20, with trading of rights commencing on Nov 21 and closing on Nov 28. The last date for acceptance and payment is Dec 5, and the rights shares are expected to be listed on Dec 19.
Khee San expects to raise between RM65 million and RM96.1 million depending on the level of subscription, with proceeds primarily earmarked to settle debts owed to scheme creditors and to fund working capital needs.
M&A Securities Sdn Bhd is the principal adviser and underwriter for the exercise.
Khee San’s regularisation plan also includes a RM137.52 million share capital reduction, a scheme of arrangement with creditors, and the establishment of an employee share scheme of up to 15% of its enlarged share base for eligible directors and employees.
Bursa Malaysia approved the plan on Aug 19, 2024, and granted Khee San until Feb 18, 2026 to complete its implementation.
Khee San executive chairman Yong Loong Chen said the launch of the rights issue "marks a step forward" in the execution of the regularisation plan, placing the company on the right track to restoring financial stability and emerging from PN17 status.
“With our strong fundamentals, clear strategic plan and support from shareholders, we are confident of sustaining this positive momentum,” he said in the statement.
Chief executive officer Edward JP Tan added that the progress reflects the company’s resilience and commitment to long-term value creation, citing prudent financial management and a focus on innovation as core priorities.
The launch of the rights issue follows earlier adjustments to Khee San’s underwriting arrangement after former substantial shareholder Ng Meng Kee ceased to be a substantial shareholder and requested to discharge his subscription undertaking.
To meet the minimum subscription level of RM55 million under the seven-for-one rights issue, the company increased its underwritten portion from RM27.05 million to RM38.98 million to cover Ng’s portion of RM11.94 million.
Khee San slipped into PN17 status in November 2021 after its wholly-owned subsidiary, Khee San Food Industries Sdn Bhd, was placed under judicial management following an application by Maybank Islamic Bhd.
Shares in Khee San slipped 1.5 sen or 6% to close at 23.5 sen on Thursday, valuing the company at RM32.26 million.