KUALA LUMPUR (April 17): Aizo Group Bhd (KL:AIZO) said it has secured approval from Bursa Malaysian for a series of corporate exercises to raise funds and strengthening its financial position.
In a press statement on Friday, Aizo said the proposals comprise a private placement, a rights issue with free warrants, a share capital reduction as well as allocations to investors and key management.
The proposed rights issue with free warrants serves as an incentive for shareholders to subscribe, said Aizo, while the share capital reduction is aimed at rationalising the company’s capital base.
The proposed fundraising exercises are pending shareholder approval at an upcoming extraordinary general meeting (EGM).
The exercises would allow Aizo to issue up to 763.9 million placement shares and more than 3.31 billion rights shares, together with free warrants.
Aizo, formerly known as Minetech Resources Bhd, originally filed for the plans in November last year. It had sought to raise up to RM200 million from the private placement exercise and rights issue exercise.
Proceeds from the private placement are intended to be channelled primarily into the company’s large scale solar 5 (LSS5) project, which was announced in April last year through a power purchase agreement with Tenaga Nasional Bhd (KL:TENAGA). It involves the development of a 99.99MWac large scale solar photovoltaic (LSS) facility in Kampar, Perak.
Aizo said the project marks its entry into renewable energy and is anticipated to contribute to earnings visibility in the years ahead.
“The approval from Bursa Securities marks a step forward in executing our capital strategy. These proposals are designed not only to strengthen our balance sheet, but also to equip Aizo with the financial flexibility required to support our next phase of growth.
“As we expand our presence in areas such as renewable energy and infrastructure, having the right capital structure is critical,” executive chairman Datuk Abang Abdillah Izzarim said in the statement.
He added that the LSS5 project is a key growth driver for the company.
Aizo’s shares were flat at 3.5 sen during Friday’s closing, giving the group a market capitalisation of RM69.8 million.