KUALA LUMPUR (July 13): Maxland Bhd (KL:MAXLAND) has proposed a rights issue of up to 2.41 billion new shares to raise up to RM60.14 million to fund its timber operations, tree plantation activities and working capital needs.
The rights shares will be issued at 2.5 sen apiece on the basis of one rights share for every existing share held on a date to be announced later, the timber company said in a Bursa Malaysia filing on Monday.
The issue price represents a 16.7% discount to the theoretical ex-rights price of three sen, derived from Maxland's five-day volume-weighted average price of 3.5 sen up to July 10.
The fund-raising exercise replaces an earlier rights issue announced in February involving 2.41 billion shares at two sen each to raise up to RM32.07 million. Maxland aborted the earlier proposal on July 1 after reassessing its funding requirements.
Under the new proposal, up to RM15 million of the proceeds will be used to expand the company's timber segment through the maintenance, upgrading and refurbishment of timber camp infrastructure and timber processing plants to improve operational efficiency, reduce downtime and extend asset life.
Another RM8 million has been earmarked for replanting and plantation improvement works covering about 5,050ha within the Sungai Pinangah Forest Reserve in Tongod, Sabah, aimed at improving production and future yield performance.
Maxland currently has a contiguous plantation landbank of about 28,051ha in Sabah, of which 9,830ha are under tree plantation, including 4,780ha of established plantations, with the balance comprising unplanted or immature areas.
The company expects to raise RM3.2 million from the exercise, under the minimum scenario. To ensure this threshold is met, shareholders Chang Keng Sing and Dennis Lim have undertaken to fully subscribe for their combined entitlement of 101.55 million rights shares and, if necessary, take up to an additional 26.45 million excess rights shares not subscribed for by other shareholders.
The company said the subscriptions by the undertaking shareholders will not trigger a mandatory general offer obligation while its public shareholding spread is expected to remain above the required 25% threshold following the completion of the exercise.
Maxland is 19%-owned by its managing director Datuk Lim Nyuk Sang.
UOB Kay Hian Securities (M) Sdn Bhd (UOBKH) has been appointed as the principal adviser for the rights issue, which is expected to be completed by the fourth quarter of 2026.