Monday, November 29, 2021
International

Ageson announces decision to abort cash call

loan stocks

The firm’s rationale for the decision was the longer time expected for the completion of the proposed rights issue of up to 12.78 billion irredeemable convertible unsecured loan stocks

Ageson Bhd, formerly Prinsiptek Corp Bhd, announced its decision to abort a cash call on Oct 20, eight months after it was first proposed.

The construction and property development company’s rationale for the decision was the longer time expected for the completion of the proposed rights issue of up to 12.78 billion irredeemable convertible unsecured loan stocks, which would have raised nearly RM320 million ($77.08 million) — 3.7 times its market value of RM85 million ($20.47 million) as at last Thursday.

Of the amount, Ageson was planning to use RM302.89 million ($72.96 million) to part-finance a proposed mixed-use development in Perak with an estimated gross development value of RM1.24 billion ($0.30 billion), and repay debt amounting to RM15.16 million ($3.65 million) owed by its 53.33%-owned subsidiary Ageson Development Sdn Bhd to RHB Bank Bhd.

Following the termination, Ageson proposed on Oct 27 to undertake a private placement of up to 20% of its issued shares to raise a much smaller amount of RM18.7 million ($4.50 million), noting that it was an “expeditious way” to access the capital markets for funds. It said it would use most of the funds to repay the amount owed to RHB.

However, the latest fundraising proposal raises questions about how Ageson plans to raise the substantial amount of funds required for its property project in Perak. It had indicated earlier that the rights issue was expected to be implemented in the fourth quarter of 2021. It is worth noting that Ageson’s share price has dropped 46% from 13 sen on Feb 26 when the exercise was announced, to seven sen last Thursday.

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