KUALA LUMPUR (Aug 21): Construction and property development company TXCD Bhd (KL:TXCD) has proposed a capital reduction of up to RM281.5 million, the disposal of its non-core subsidiaries and a RM22 million private placement under its revised regularisation plan.
The capital reduction will be used to offset the group’s accumulated losses, while the disposal of non-core units will leave Ageson Kensetsu Sdn Bhd (AKSB) as TXCD’s sole operating subsidiary, focusing the group on its construction business. The private placement, meanwhile, will raise RM22 million mainly for working capital, according to a bourse filing on Friday.
The proposed capital reduction involves cancelling up to RM281.5 million of TXCD’s ordinary share capital and irredeemable convertible preference share (ICPS) capital. The resulting credit will be used to offset accumulated losses, with any surplus credited to retained earnings.
Based on the group’s unaudited financial position as of end-March, the exercise would wipe out RM272.05 million in accumulated losses and leave retained earnings of RM9.45 million.
Meanwhile, TXCD plans to 'reorganise' its subsidiaries by first acquiring AKSB from Ageson K2 Sdn Bhd for a nominal RM1 before disposing of its entire stake in Ageson Data Sdn Bhd to Forever Synergy Sdn Bhd, also for RM1.
Forever Synergy, an investment holding company incorporated in January, is wholly-owned by Yap Chee Soon.
Ageson Data and its subsidiaries Ageson K2, Ageson V2 Sdn Bhd and Ageson Retails Sdn Bhd — all of which are dormant — will be disposed of as non-core entities. They had pro forma consolidated net liabilities of RM119.44 million as at June 30, 2025.
Following the reorganisation, AKSB will be TXCD’s sole operating subsidiary. TXCD also holds a 90.91% stake in Prinsiptek (M) Sdn Bhd, which is under liquidation and is no longer classified as a subsidiary after TXCD ceased to have control over it in 2020.
As for the private placement, TXCD will issue 275 million new shares at eight sen apiece to a group of predetermined investors who have entered into subscription agreements, raising RM22 million in cash. The new shares will represent between 32.7% and 46.88% of its enlarged share base, depending on the conversion of its outstanding ICPS.
Of the proceeds, RM20.2 million will be used as working capital for the group and RM1.8 million to defray expenses related to the regularisation plan.
The placement investors comprise TXCD managing director Chew Swe Siew @ Chew Swee Siew, Armani Synergy Sdn Bhd, Agrobulk Holdings Sdn Bhd, Volar Holding Sdn Bhd, Lagenda Properties Bhd (KL:LAGENDA) major shareholder Datuk Doh Jee Ming, Unitrade Industries Bhd (KL:UNITRAD) executive director Simson Sim Xian Zhi, Tan Wei Beoh, Tan Chee Chuan and Thow Calvin.
Chew, who is already TXCD’s major shareholder, is the only placement investor related to the company. Post-issuance, Chew’s total stake will rise to 25.17% from 22.19%.
The other eight are third parties unrelated to TXCD’s existing directors, major shareholders or chief executive.
Armani Synergy — owned by Datuk Seri Wong Sze Chien (50%), Datuk Seri Azlan Azmi (30%) and Datuk Seri Andrew Lim Eng Guan (20%) — is a substantial shareholder of TAFI Industries Bhd (KL:TAFI) and Scanwolf Corp Bhd (KL:SCNWOLF).
Agrobulk is a substantial shareholder of NuEnergy Holdings Bhd (KL:NHB), Jentayu Sustainables Bhd (KL:JSB) and Golden Land Bhd (KL:GLBHD). Meanwhile, Volar Holdings Sdn Bhd is a vehicle owned by Liew Foo Heen (60.85%) and Wong Sai Kit (39.15%).
The placement will only be implemented after completion of the capital reduction.
Post-regularisation plan exercises, TXCD will have a share base of 585.67 million shares and share capital of RM22.24 million. The plan is subject to approval from Bursa Securities, TXCD’s shareholders and a court order for the capital reduction.
The revised regularisation plan comes after TXCD withdrew its previous plan following regulatory feedback. The revised proposal drops an earlier plan for newly incorporated RCV Bhd to assume TXCD’s listing status through a securities exchange, allowing TXCD to retain its listing status instead.
TXCD was classified as a Practice Note 17 (PN17) company on Oct 31, 2023 after its then external auditor, Jamal, Amin & Partners, issued a disclaimer of opinion on its audited financial statements for the 18-month financial period ended Dec 31, 2022.
The group later triggered an additional PN17 criterion after its shareholders’ equity fell to RM2.38 million as at Sept 30, 2024, equivalent to just 0.98% of its share capital, while accumulated losses widened to RM279.5 million.
Its subsequent external auditor, LTTH PLT, also issued a disclaimer of opinion on TXCD’s audited accounts for the 18-month period ended June 30, 2024.
Shares of TXCD ended unchanged at 14.5 sen on Friday, valuing the company at RM45.19 million.