News

Advance Synergy Berhad ("ASB" Or "Company") - Proposed Capital Reduction; And - Proposed Rights Issue

BackDec 10, 2007
General Announcement
Reference No MM-071205-63418

Submitting Merchant Bank
:
 CIMB INVESTMENT BANK BERHAD
Company Name
:
 ADVANCE SYNERGY BERHAD
Stock Name
:
 ASB
Date Announced
:
 05/12/2007


Type : Announcement
Subject : ADVANCE SYNERGY BERHAD ("ASB" OR "COMPANY")

- PROPOSED CAPITAL REDUCTION; AND

- PROPOSED RIGHTS ISSUE

Contents :

? PROPOSED CAPITAL REDUCTION WHICH COMPRISES:
? PROPOSED REDUCTION OF THE ISSUED AND PAID-UP SHARE CAPITAL OF ASB FROM A MAXIMUM OF RM506,690,428 COMPRISING 506,690,428 ORDINARY SHARES IN ASB ("ASB SHARES") OF RM1.00 EACH (ASSUMING THAT ALL ASB'S OUTSTANDING WARRANTS CONSTITUTED BY DEED POLL DATED 28 APRIL 2000 AND SUPPLEMENTAL DEED POLL DATED 24 JULY 2003 ("WARRANTS") ARE EXERCISED AND THE NEW ASB SHARES ARISING THEREFROM ARE ISSUED BEFORE THE CUT-OFF DATE FOR THE PROPOSED CAPITAL REDUCTION) TO RM152,007,128 COMPRISING 506,690,428 ASB SHARES OF RM0.30 EACH, BY CANCELLING RM0.70 OF PAR VALUE FROM EVERY ASB SHARE OF RM1.00 EACH TO REDUCE THE ACCUMULATED LOSSES IN THE COMPANY; AND

? PROPOSED REDUCTION OF UP TO THE ENTIRE AMOUNT IN THE SHARE PREMIUM ACCOUNT OF ASB TO REDUCE THE ACCUMULATED LOSSES IN THE COMPANY; AND

? 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 SHARE HELD ON AN ENTITLEMENT DATE AND AT A CASH CALL AMOUNT TO BE DETERMINED AND ANNOUNCED LATER, WHICH MAY BE IMPLEMENTED ON A TWO (2)-CALL BASIS (WHERE THE FIRST CALL WILL BE SETTLED VIA CASH PAYMENT WHILE THE SECOND CALL WILL BE SETTLED VIA CAPITALISATION OF ASB'S SHARE PREMIUM ACCOUNT), ("PROPOSED RIGHTS ISSUE")

Reference is made to the announcements dated 20 February 2006, 22 June 2006, 19 September 2006, 22 February 2007, 5 April 2007, 18 April 2007, 29 June 2007 and 30 August 2007 in relation to the above.

On behalf of the Board of Directors of ASB ("Board"), CIMB Investment Bank Berhad wishes to announce that on 5 December 2007, the Board had resolved to do the following:

(i) to implement the Proposed Rights Issue on a two (2)-call basis;

(ii) to fix the first cash call amount at RM0.07 per ICULS; and

(iii) to fix the second non-cash call amount at RM0.08 per ICULS which will be paid out of the share premium account of ASB.

Strictly for illustrative purposes, where an ICULS holder converts his ICULS into ASB Shares by surrendering for cancellation two (2) ICULS for one (1) ASB Share, he would have incurred a total of RM0.14 to obtain one (1) ASB Share, which is effectively the cash call amount for two (2) ICULS. The effective cash call per ASB Share of RM0.14 represents a discount of approximately 51.6% to the 5-day weighted average market price of ASB Shares up to and including 4 December 2007, being the market day immediately preceding the date of announcement on the fixing of the first cash call amount, of RM0.289 per ASB Share ("WAMP"). Nonetheless, on a proforma basis strictly for illustrative purposes, assuming that the Proposed Rights Issue have been fully subscribed, the ICULS holders have immediately converted their entire ICULS by surrendering two (2) ICULS for one (1) ASB Share and none of the Warrants are exercised, the WAMP would theoretically have been RM0.194 per ASB Share ("Fully-diluted WAMP") after taking into consideration the theoretical dilutive effect of the ICULS. In this case, the effective cash call for one (1) ASB Share of RM0.14 represents a discount of approximately 27.8% to the Fully-diluted WAMP of RM0.194 per ASB Share.

An appropriate announcement on the adjustment(s) to the exercise price and number of Warrants, where applicable, would be made in due course.

This announcement is dated 5 December 2007.