04/05/2011 – General Announcement
General Announcement |
Reference No OI-110504-62788 |
Submitting Merchant Bank |
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OSK INVESTMENT BANK BERHAD | ||
Company Name |
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CAREPLUS GROUP BERHAD (ACE Market) | ||
Stock Name |
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CAREPLS | ||
Date Announced |
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04/05/2011 | ||
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OSK Investment Bank Bhd | ||
Sponsor |
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Same as above | ||
Type |
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Reply to query | ||
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TE-110429-62757 | ||
Subject |
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NEW ISSUE OF SECURITIES
COMBINATION OF NEW ISSUE OF SECURITIES |
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Description |
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CAREPLUS GROUP BERHAD (“CAREPLUS” OR THE “COMPANY”)
PROPOSED BONUS ISSUE OF 105,000,000 WARRANTS IN CAREPLUS (“WARRANTS”) ON THE BASIS OF ONE (1) FREE WARRANT FOR EVERY TWO (2) EXISTING ORDINARY SHARES OF RM0.10 EACH HELD IN CAREPLUS (“CAREPLUS SHARES” OR “SHARES”) ON AN ENTITLEMENT DATE TO BE DETERMINED LATER (“PROPOSED BONUS ISSUE OF WARRANTS”); AND PROPOSED PRIVATE PLACEMENT OF UP TO TWENTY PERCENT (20%) OF THE ISSUED AND PAID-UP SHARE CAPITAL OF CAREPLUS (“PROPOSED PRIVATE PLACEMENT”) (COLLECTIVELY REFERRED HEREINAFTER AS THE “PROPOSALS”) |
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Announcement Details/Table Section :
This announcement should be read in conjunction with the earlier announcement made on 28 April 2011. All defined terms used in this announcement, unless the context otherwise states, shall bear the same meaning as those defined in the announcement dated 28 April 2011 in relation to the Proposals. We refer to the announcement dated 28 April 2011 in relation to the Proposals (“Announcement”). In relation thereto, the Board wishes to clarify the following: (1) Basis of determining the exercise price of the Warrants The exercise price of the Warrants will be determined based on a price by reference to the five (5)-day VWAP of Careplus Shares immediately preceding the price-fixing date, to be determined by the Board after receipt of all relevant approvals for the Proposed Bonus Issue of Warrants, but before the Entitlement Date. In any case, the exercise price of the Warrants will not be lower than the par value of Careplus Shares. The five (5)-day VWAP of Careplus Shares up to and including 27 April 2011, being the last trading date prior to the date of the Announcement was RM0.34. For illustrative purposes, the exercise price of the Warrants is indicatively set at RM0.40 per Careplus Share, which represents a premium of approximately 17.65% or RM0.06 over the five (5)-day VWAP of Careplus Shares up to and including 27 April 2011. (2) Whether there is any premium or discount on the five (5)-day VWAP of Careplus Shares immediately preceding the price-fixing date, in determining the issue price for the Placement Shares The Placement Shares will be issued based on a price by reference to the five (5)-day VWAP of Careplus Shares immediately preceding the price-fixing date, to be determined by the Board after obtaining all the relevant approvals for the Proposed Private Placement. The Placement Shares will be issued either at: (a) a premium above the five (5)-day VWAP of Careplus Shares immediately preceding the price-fixing date; or (b) a discount of not more than ten percent (10%) to the five (5)-day VWAP of Careplus Shares immediately preceding the price-fixing date. In any case, the issue price of the Placement Shares will not be lower than the par value of Careplus Shares. (3) Details of the “Others” working capital, and the breakdown of the amount to be utilised for each of these working capital As set out in Section 2.2.6 of the Announcement, the details of the utilisation of the estimated gross proceeds to be raised from the Proposed Private Placement are set out below, assuming the following scenarios:
It should be highlighted that the RM8.4 million proceeds will only be raised from the Proposed Private Placement in the event that all the 105,000,000 Warrants pursuant to the Proposed Bonus Issue of Warrants are exercised prior to the Proposed Private Placement. However, this is unlikely the case as the Warrants have a five (5)-year tenure while the Proposed Private Placement is expected to be completed within six (6) months upon the approval being obtained from Bursa Securities. However, in the event that any of the 105,000,000 Warrants are exercised prior to the Proposed Private Placement, 80% of the additional proceeds to be raised from the Proposed Private Placement will be used to fund the purchase of raw materials (which will also include energy costs, packing materials as well as certain chemicals used for the production of the Group’s products), whilst 20% of the additional proceeds raised will be used for the Group’s operational expenses (including salaries and wages). (4) Justification for embarking on the Proposed Private Placement rather than other available options With its stronger business profile through its listing on Bursa Securities in December 2010, the Group is working towards procuring more sales, and is given the opportunity to further expand its business to cater for the growing demand of its products. As mentioned in Section 6.23 of the Prospectus, the Company’s initial plan in setting up the ten (10) new production lines (in three (3) phases) are expected to be as follows:
Note: * Based on single-former production lines However, the Company is presently ahead of its initial plan whereby out of the ten (10) new production lines, four (4) new single-former production lines have been installed, and the Company is working towards installing another three (3) double-former production lines using the proceeds to be raised from the Proposed Private Placement. To embark on the Group’s expansion plan and to accelerate its expansion plan, given the greater opportunities, the Group intends to raise additional funds through a proposed private placement, without incurring interest costs, as compared to bank borrowings.
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