News
Advance Synergy Berhad ("ASB" Or "Company")
BackApr 05, 2007
| General Announcement Reference No MM-070405-65486 |
| Submitting Merchant Bank | : | CIMB INVESTMENT BANK BERHAD |
| Company Name | : | ADVANCE SYNERGY BERHAD |
| Stock Name | : | ASB |
| Date Announced | : | 05/04/2007 |
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| Type | : | Announcement |
| Subject | : | ADVANCE SYNERGY BERHAD ("ASB" OR "COMPANY") |
Contents :
PROPOSED CAPITAL REDUCTION WHICH COMPRISES:
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- PROPOSED REDUCTION OF THE ISSUED AND PAID-UP SHARE CAPITAL OF ASB FROM A MAXIMUM OF RM506,690,428 COMPRISING 506,690,428 ORDINARY STOCK UNITS IN ASB ("ASB STOCK UNITS") OF RM1.00 EACH (ASSUMING ALL ASB'S WARRANTS CONSTITUTED BY DEED POLL DATED 28 APRIL 2000 AND SUPPLEMENTAL DEED POLL DATED 24 JULY 2003 ("ASB WARRANTS") ARE EXERCISED AND THE NEW ASB STOCK UNITS ARISING THEREFROM ARE ISSUED BEFORE THE CUT-OFF DATE FOR THE PROPOSED CAPITAL REDUCTION) TO RM152,007,128 COMPRISING 506,690,428 ASB STOCK UNITS OF RM0.30 EACH, BY CANCELLING RM0.70 OF PAR VALUE FROM EVERY ASB STOCK UNIT OF RM1.00 EACH TO REDUCE THE ACCUMULATED LOSSES IN THE COMPANY ("PROPOSED PAR VALUE REDUCTION"); AND
- PROPOSED REDUCTION OF THE SHARE PREMIUM ACCOUNT OF ASB TO REDUCE THE ACCUMULATED LOSSES IN THE COMPANY ("PROPOSED SHARE PREMIUM ACCOUNT REDUCTION");
- PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO RM266,012,475 NOMINAL VALUE OF 2% 10-YEAR IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS ("ICULS") AT 100% OF THE NOMINAL VALUE OF RM0.15 EACH (OR EQUIVALENT OF UP TO 1,773,416,498 ICULS) ON THE BASIS OF RM0.525 NOMINAL VALUE OF ICULS (OR EQUIVALENT TO 3.5 ICULS) FOR EVERY ONE (1) ASB STOCK UNIT HELD AFTER THE PROPOSED PAR VALUE REDUCTION, WHICH MAY BE IMPLEMENTED ON A TWO (2)-CALL BASIS ON AN ENTITLEMENT DATE AND AT A CASH CALL AMOUNT TO BE DETERMINED AND ANNOUNCED LATER ("PROPOSED RIGHTS ISSUE");
- PROPOSED INCREASE IN THE AUTHORISED SHARE CAPITAL OF ASB FROM RM800,000,000 DIVIDED INTO 800,000,000 ORDINARY SHARES OF RM1.00 EACH TO RM900,000,000 DIVIDED INTO 900,000,000 ORDINARY SHARES OF RM1.00 EACH; AND
- PROPOSED CONVERSION OF ASB STOCK UNITS TO ORDINARY SHARES
Reference is made to the announcements dated 20 February 2006, 22 June 2006, 19 September 2006 and 22 February 2007 in relation to the above. All definitions used in this announcement shall be the same as those used in the announcement dated 20 February 2006.
On behalf of the Board of Directors of ASB ("Board"), CIMB Investment Bank Berhad (formerly known as Commerce International Merchant Bankers Berhad) wishes to announce that the Proposed Rights Issue has been revised to include a flexibility for the Proposed Rights Issue to be implemented either by way of a one (1)-call basis ("One-Call Basis) or a two (2)-call basis ("Two-Call Basis").
Further details of the revised Proposed Rights Issue are set out below.
2. DETAILS OF THE PROPOSED RIGHTS ISSUE
The Proposed Rights Issue shall involve a renounceable rights issue of up to RM266,012,475 nominal value of ICULS at 100% of the nominal value of RM0.15 each (or equivalent of up to 1,773,416,498 ICULS) on the basis of RM0.525 nominal value of ICULS (or equivalent to 3.5 ICULS) for every one (1) ASB Stock Unit held after the Proposed Par Value Reduction, which may be implemented on the Two-Call Basis on an entitlement date and at a cash call amount to be determined and announced later.
Depending on the prevailing market condition and market price of ASB Stock Units at the time of the implementation of the Proposed Rights Issue, the Proposed Rights Issue may be implemented either by way of the One-Call Basis or the Two-Call Basis. Under the One-Call Basis, the cash call amount will be fixed at RM0.15 per ICULS, whilst on the Two-Call Basis, the first call will be settled via cash payment while the second call will be settled via the capitalisation of the Company's share premium account. Accordingly, under the Two-Call Basis, the cash call amount will be set below RM0.15 per ICULS. The cash call amount for the Proposed Rights Issue will only be determined and announced at a later date.
Based on the Maximum Scenario, assuming the ASB Warrants are fully exercised and the new ASB Stock Units arising therefrom are issued prior to the Entitlement Date, the Proposed Rights Issue would involve the issuance of a maximum of up to 1,773,416,498 ICULS representing a total nominal value of RM266,012,475.
However, under the Minimum Scenario which is based on the issued and paid-up share capital of ASB as at 13 March 2007 of RM337,793,619 comprising 337,793,619 ASB Stock Units and on the assumption that the outstanding ASB Warrants as at 13 March 2007 are not exercised into new ASB Stock Units, the Proposed Rights Issue will involve the issuance of 1,182,277,667 ICULS representing a total nominal value of RM177,341,650.
The actual number of ICULS to be issued pursuant to the Proposed Rights Issue is dependent on the share capital of the Company as at the Entitlement Date.
Under the Two-Call Basis, the gross proceeds to be raised will depend on the actual number of ICULS to be issued as well as the cash call amount.
3. RATIONALE OF THE REVISED PROPOSED RIGHTS ISSUEDepending on the prevailing market condition and market price of ASB Stock Units at the time of the implementation of the Proposed Rights Issue, the Proposed Rights Issue may be implemented either by way of the One-Call Basis or the Two-Call Basis. Under the One-Call Basis, the cash call amount will be fixed at RM0.15 per ICULS, whilst on the Two-Call Basis, the first call will be settled via cash payment while the second call will be settled via the capitalisation of the Company's share premium account. Accordingly, under the Two-Call Basis, the cash call amount will be set below RM0.15 per ICULS. The cash call amount for the Proposed Rights Issue will only be determined and announced at a later date.
Based on the Maximum Scenario, assuming the ASB Warrants are fully exercised and the new ASB Stock Units arising therefrom are issued prior to the Entitlement Date, the Proposed Rights Issue would involve the issuance of a maximum of up to 1,773,416,498 ICULS representing a total nominal value of RM266,012,475.
However, under the Minimum Scenario which is based on the issued and paid-up share capital of ASB as at 13 March 2007 of RM337,793,619 comprising 337,793,619 ASB Stock Units and on the assumption that the outstanding ASB Warrants as at 13 March 2007 are not exercised into new ASB Stock Units, the Proposed Rights Issue will involve the issuance of 1,182,277,667 ICULS representing a total nominal value of RM177,341,650.
The actual number of ICULS to be issued pursuant to the Proposed Rights Issue is dependent on the share capital of the Company as at the Entitlement Date.
Under the Two-Call Basis, the gross proceeds to be raised will depend on the actual number of ICULS to be issued as well as the cash call amount.
The Proposed Rights Issue is undertaken primarily to finance the repayment of borrowings and working capital of the Group. Nevertheless, if the funds raised is greater than the amount allotted for working capital requirements and for repayment of borrowings, the Company will use the additional funds raised for the expansion of its hotel operations. The introduction of the flexibility to allow the Proposed Rights Issue to be implemented on a One-Call Basis is to allow the cash call amount to be fixed at the full nominal value of RM0.15 per ICULS. This allows ASB to raise a greater amount of proceeds via the Proposed Rights Issue if the market conditions are conducive.
The issue of the ICULS on a rights basis will allow the stockholders of the Company to participate in the fund raising exercise as well as to maintain or increase their participation in the equity of the Company as the ICULS are convertible into new ASB Stock Units. The holders of the ICULS will be entitled to receive coupon payments throughout the tenure of the ICULS. Similarly, the fixing of the coupon rate will enable the Company to limit the risk associated with volatility of interest rates in relation to the ICULS.
The issue of the ICULS on a rights basis will allow the stockholders of the Company to participate in the fund raising exercise as well as to maintain or increase their participation in the equity of the Company as the ICULS are convertible into new ASB Stock Units. The holders of the ICULS will be entitled to receive coupon payments throughout the tenure of the ICULS. Similarly, the fixing of the coupon rate will enable the Company to limit the risk associated with volatility of interest rates in relation to the ICULS.
4. UTILISATION OF PROCEEDS
The actual gross proceeds to be raised from the Proposed Rights Issue will depend on the actual number of ICULS to be issued and the cash call amount.
Where the Proposed Rights Issue is implemented on the One-Call Basis in the manner set out in Section 2 above, the Proposed Rights Issue will raise gross proceeds of between RM177,341,650 and RM266,012,475 under the Minimum Scenario and Maximum Scenario respectively.
Strictly for illustrative purposes, where the Proposed Rights Issue is implemented on the Two-Call Basis in the manner as set out in Section 2 above and assuming the cash call amount is fixed at RM0.07 per ICULS, the Proposed Rights Issue will raise gross proceeds of between RM82,759,437 and RM124,139,155 under the Minimum Scenario and Maximum Scenario, respectively.
Based on the above scenarios, the proposed utilisation of proceeds to be raised from the Proposed Rights Issue is shown in Table A.
5. EFFECTS OF THE PROPOSED RIGHTS ISSUE ASSUMING IMPLEMENTED ON THE ONE-CALL BASISWhere the Proposed Rights Issue is implemented on the One-Call Basis in the manner set out in Section 2 above, the Proposed Rights Issue will raise gross proceeds of between RM177,341,650 and RM266,012,475 under the Minimum Scenario and Maximum Scenario respectively.
Strictly for illustrative purposes, where the Proposed Rights Issue is implemented on the Two-Call Basis in the manner as set out in Section 2 above and assuming the cash call amount is fixed at RM0.07 per ICULS, the Proposed Rights Issue will raise gross proceeds of between RM82,759,437 and RM124,139,155 under the Minimum Scenario and Maximum Scenario, respectively.
Based on the above scenarios, the proposed utilisation of proceeds to be raised from the Proposed Rights Issue is shown in Table A.
The effects of the Proposed Rights Issue on the issued and paid-up share capital, major stockholders' stockholdings and dividends, if implemented on a One-Call Basis or Two-Call Basis will be the same.
The effects of the Proposed Rights Issue if implemented on the One-Call Basis on the NA, gearing, earnings and EPS are as follows:
The effects of the Proposed Rights Issue if implemented on the One-Call Basis on the NA, gearing, earnings and EPS are as follows:
5.1 Group NA and Group NA per ASB Stock Unit
Based on the audited financial statements of the Group as at 31 December 2005, the proforma effects of the Proposed Capital Reduction and the Proposed Rights Issue on the Group NA and Group NA per ASB Stock Unit are shown in Table B.
5.2 GearingThe proforma effects of the Proposed Capital Reduction and the Proposed Rights Issue on the gearing of the Group, are shown in Table C.
5.3 Earnings and EPS
The Proposed Rights Issue is not expected to have any material effect on the earnings and EPS of the Group for the financial year ending 31 December 2007 as it is only expected to be completed towards the end of year 2007. The Proposed Rights Issue on the One-Call Basis will allow for a higher repayment of part of the Group's bank borrowings from the proceeds raised and is expected to result in a higher net interest savings to the Group. Together with the potential expansion of its hotel operations, ASB expects enchancement in its future earnings. Nevertheless, upon the conversion of the ICULS, the EPS will be reduced accordingly. Further, EPS computed on a fully diluted basis may also be reduced accordingly.
Apart from the above revisions, all other announced terms and conditions for the Proposals shall remain unchanged.
edms_050407-table(FINAL).pdf
Attachments
- edms_050407-table(FINAL).pdf (Size: 47,829 bytes)