KUALA LUMPUR (Feb 12): Maxland Bhd (KL:MAXLAND) has proposed a rights issue to raise up to RM32.07 million to fund maintenance of its timber camp infrastructure, tree replanting and plantation improvement works, and working capital.
The issuance, involving up to 2.405 billion rights shares, will be offered at two sen each, on the basis of one new share for every one existing share held, the timber firm said in a bourse filing.
The two sen per share issue price represents a 16.32% to 32.2% discount to Maxland’s five-day to 12-month volume weighted average market price of up to Feb 11 of 2.78 sen and 3.9 sen.
Non-independent and non-executive chairman Datuk Abd Aziz Haji Sheikh Fadzir had provided an undertaking to fully subscribe to his entitlement — 17.7 million rights shares — and an additional undertaking for 110 million rights shares if required.
Assuming a base case, where none of its outstanding 801.81 million warrants B are exercised, and entitlements are fully subscribed, the company expects to raise RM32.07 million from the issuance of 1.6 billion rights shares.
Proceeds from the exercise will be used to fund timber camp infrastructure and processing plant maintenance, tree plantation, working capital and defray the exercise’s expenses.
Over the past five years, Maxland said it has undertaken five equity fundraising exercises.
It completed a RM6.78 million private placement and a RM51 million redeemable convertible note issuance in June 2021, a RM2.05 million private placement in December 2021, a RM13.64 million private placement in January 2023, and an RM11.37 million private placement in February 2024.
The proposed rights issue is subject to shareholders’ nods at an extraordinary general meeting to be convened.
The company anticipates completing the exercise in the second quarter of 2026.
Maxland is 19%-owned by its 73-year old managing director Datuk Lim Nyuk Sang.
Shares in Maxland were untraded on Thursday. The counter was last traded on Feb 9, when it closed at 3.5 sen, valuing the company at RM56.13 million.