PROPOSED PRIVATE PLACEMENT OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SHARE CAPITAL OF GHL ( PROPOSED PRIVATE PLACEMENT )

Transcription

1 GHL SYSTEMS BERHAD ( GHL OR COMPANY ) PROPOSED PRIVATE PLACEMENT OF UP TO 10% OF THE TOTAL NUMBER OF ISSUED SHARE CAPITAL OF GHL ( PROPOSED PRIVATE PLACEMENT ) This announcement is dated 14 May 2018 ( Announcement ). 1. INTRODUCTION On behalf of the Board of Directors of GHL ( Board ), AmInvestment Bank Berhad ( AmInvestment Bank ) wishes to announce that the Company proposes to undertake a private placement of up to ten percent (10%) of the total number of issued share capital of the Company. 2. PROPOSED PRIVATE PLACEMENT 2.1 Size of the placement The size of the Proposed Private Placement will be up to 10% of the total number of issued share capital of the Company. As at 8 May 2018, being the latest practicable date ( LPD ) prior to the date of this Announcement, based on the total number of issued share capital of 658,766,391 ordinary shares in GHL ( GHL Shares ) (net of 678,601 treasury shares), the size of the Proposed Private Placement is up to 65,876,639 new GHL Shares ( Placement Shares ). As at the LPD, GHL has a total of 12,900,000 outstanding options under the Company s executive share scheme ( ESS ) which has been granted, vested but yet to be exercised. The 65,876,639 Placement Shares has been calculated assuming none of these options under the ESS are exercised and the 678,601 treasury shares are not resold in the open market prior to the implementation of the Proposed Private Placement. The Proposed Private Placement will be undertaken in accordance with the general mandate pursuant to Section 75 and Section 76 of the Companies Act, 2016 ( Act ) obtained from the shareholders of GHL at the annual general meeting ( AGM ) convened on 26 May 2017 ( General Mandate ). The General Mandate is in force until the Company s next AGM scheduled on 30 May 2018 (unless revoked or varied by the shareholders at a general meeting prior to the next AGM). GHL proposes to obtain a new mandate at the forthcoming AGM on 30 May The Proposed Private Placement will be undertaken either under the existing mandate or the new mandate to be obtained. 2.2 Placement arrangement The Placement Shares will be placed out to third party investor(s) to be identified at a later date in accordance with Section 6.04(c) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) ( Listing Requirements ). The Placement Shares will not be placed to the following parties:- (i) (ii) a director or major shareholder or chief executive of GHL ( Interested Person );or a person connected with an Interested Person; and (iii) nominee corporations, unless the names of the ultimate beneficiaries are disclosed. The Proposed Private Placement may be implemented in tranches within six (6) months from the date of approval of Bursa Securities for the Proposed Private Placement or any extended period as may be 1

2 approved by Bursa Securities, subject always to the expiry of the General Mandate or a new mandate being obtained from shareholders of GHL, as the case may be. The Company believes that the placee(s) may be identified and procured either over a period of time or simultaneously. 2.3 Basis of pricing The issue price of the Placement Shares shall be determined by the Board at a later date. The Placement Shares will not be priced at more than 10% discount to the five (5)-day volume weighted average market price ( VWAMP ) of GHL Shares immediately before the price fixing date. For information only, the five (5)-day VWAMP of the GHL Shares up to 8 May 2018 being the date prior to this Announcement, is RM (source: Bloomberg). 2.4 Ranking of Placement Shares The Placement Shares shall, upon allotment and issue, rank equally in all respects with the existing GHL Shares, save and except that the holders of the Placement Shares shall not be entitled to any dividends, rights, allotments and/or other distributions which may be declared, made or paid to shareholders, the entitlement date of which is before the date of allotment of the Placement Shares. 2.5 Listing of and Quotations for the Placement Shares An application will be made to Bursa Securities for the listing of and quotation for the Placement Shares on the Main Market of Bursa Securities. 2.6 Utilisation of proceeds The actual amount of proceeds to be raised from the Proposed Private Placement cannot be determined at this juncture as the amount to be raised will depend on the actual number of Placement Shares to be issued and the issue price(s) of the Placement Shares. Based on the issue price of RM1.32, being approximately the five (5)-day VWAMP of GHL Shares up to 8 May 2018 per Placement Share, the Proposed Private Placement of 65,876,639 GHL Shares is expected to raise gross proceeds of up to approximately RM86.96 million. 2

3 The proposed utilisation of the Proposed Private Placement proceeds is as follows:- Proposed Utilisation of Proceeds Note Amount (Up to) () Estimated timeframe for utilisation Working capital 86,657 Within 24 months Estimated expenses in relation to the Proposed Private Placement (b) 300 Within 6 months Total 86,957 In the event of a variation in the actual gross proceeds raised due to differences in the issue price(s) and/or the number of Placement Shares issued, the amount allocated for working capital purposes will be varied accordingly. Notes:- The working capital requirements of the GHL Group include but not limited to payment of trade creditors, repayment of trade/revolving credit facilities, if any and/or operating and administration expenses. Operating and administration expenses include but not limited to finance costs, personnel expenses, marketing and distribution expenses as well as corporate and statutory expenses. The amount of proceeds to be allocated for each of the working capital requirement stated above cannot be ascertained at this juncture as it is dependent upon the operating requirements at that point in time. (b) The estimated expenses consist of professional fees, fees payable to authorities and other miscellaneous expenses. Any variation in the actual amount of the expenses will be adjusted in the portion of the proceeds to be utilised for working capital. Pending the utilisation of proceeds from the Proposed Private Placement, the proceeds would be placed as deposits with licensed financial institutions. 3. RATIONALE FOR THE PROPOSED PRIVATE PLACEMENT The Proposed Private Placement is intended to procure potential strategic investor(s) that may add value to GHL s plans to grow in the payment solution space. The Proposed Private Placement also enables GHL to raise funds for the Group s working capital. 3

4 4. EFFECTS OF THE PROPOSED PRIVATE PLACEMENT The financial effects of the Proposed Private Placement have been computed based on the assumption that none of the 12,900,000 ESS options as at the LPD are exercised and none of the 678,601 treasury shares as at LPD are resold in the open market prior to the implementation of the Proposed Private Placement. 4.1 Share capital The effects of the Proposed Private Placement on the issued and paid-up share capital of GHL are as follows:- No. of shares Share capital ( 000) () Issued share capital as at LPD 659, ,109 Treasury shares as at LPD (679) (306) Issued share capital (net of treasury shares) 658, ,803 To be issued pursuant to the Proposed Private Placement 65,877 86,957 Enlarged issued share capital 724, ,760 Note:- * Computed based on the indicative issue price of RM1.153 per Placement Share. 4.2 Earnings and earnings per share The Proposed Private Placement is not expected to have any material effect on the earnings of GHL Group for the financial year ending 31 December The earnings per share shall correspondingly be diluted as a result of the increase in the number of issued share capital pursuant to the Proposed Private Placement. The Proposed Private Placement is expected to contribute positively to the consolidated earnings of GHL Group for the ensuing financial years when the benefits of the proposed utilisation of proceeds are realised. 4.3 Net assets ( NA ) and NA per Share Based on the audited consolidated financial statements of GHL as at 31 December 2017, the pro forma effects of the Proposed Private Placement on the NA, NA per Share and gearing of GHL Group are as follows:- Audited as at 31 December 2017 After Proposed Private Placement Share capital 208, ,066 Reserves (3,919) (3,919) Retained earnings 70,311 (b) 70,011 Treasury shares (306) (306) NA attributable to owners of GHL 274, ,852 Non-controlling interest Total equity 274, ,981 4

5 Audited as at 31 December 2017 After Proposed Private Placement GHL shares (excluding treasury shares) ( 000) 658, ,643 NA per share (RM) Total borrowings 34,186 34,186 Gearing (times) Notes:- (b) After taking into consideration the issuance of million Placement Shares at an indicative issue price of RM1.32 each. After accounting for estimated expenses of RM0.3 million pursuant to the Proposed Private Placement. 4.4 Convertible securities Save for the 12,900,000 outstanding ESS options yet to be exercised as at the LPD, GHL does not have any other convertible securities. The Proposed Private Placement will not have any effect on the outstanding ESS Options. [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 5

6 4.5 Substantial shareholders shareholdings The effects of the Proposed Private Placement on the substantial shareholders shareholdings are as follows:- As at LPD After the Proposed Private Placement Direct Indirect Direct Indirect Substantial Shareholders GHL Shares %* GHL Shares %* GHL Shares %** GHL Shares %** Actis Stark (Mauritius) Limited 291,536, ,536, Loh Wee Hian 85,371, ,776, ,371, ,776, Kumpulan Wang Persaraan 33,096, ,420, ,096, ,420, Placee(s) ,876, Notes:- * Based on GHL s issued share capital of 659,444,992 shares as at LPD and excluding 678,601 GHL shares held as treasury as at LPD. ** Based on GHL s issued share capital of 725,321,631 shares after the Proposed Private Placement and excluding 678,601 GHL shares held as treasury as at LPD. By virtue of his deemed interest via Tobikiri Capital Limited and his child, Mr Loh Hin Yaw. 6

7 5. APPROVALS REQUIRED The Proposed Private Placement is subject to the following approvals being obtained:- (i) (ii) the approval of Bursa Securities for the listing of and quotation for the Placement Shares on the Main Market of Bursa Securities; and the approvals / consents of any other relevant authorities / parties, if required. The Company had obtained the approval of its shareholders at its AGM convened on 26 May 2017 pursuant to Section 75 and Section 76 of the Act that empowers the Board to issue new GHL Shares from time to time and upon such terms and conditions and for such purposes as the Board may deem fit provided that the aggregate number of GHL Shares to be issued does not exceed ten percent (10%) of the issued and paid-up share capital of the Company. The approval is valid until the Company s next AGM scheduled on 30 May 2018 (unless revoked or varied by the shareholders at a general meeting prior to the next AGM). GHL proposes to obtain a new mandate at the forthcoming AGM on 30 May The Proposed Private Placement will be undertaken either under the existing mandate or the new mandate to be obtained. The Proposed Private Placement is not conditional upon any other proposals undertaken or to be undertaken by the Company. 6. DIRECTORS AND MAJOR SHAREHOLDERS INTEREST None of the directors and/or major shareholders or persons connected with them has any interest, direct or indirect, in the Proposed Private Placement in view that the Placement Shares will be placed to third party investors as detailed in Section 2.2 above. 7. DIRECTORS STATEMENT The Board, having considered all aspects of the Proposed Private Placement, is of the opinion that the Proposed Private Placement is in the best interest of the Company. 8. APPLICATIONS TO THE RELEVANT AUTHORITIES Applications to the relevant authorities for the Proposed Private Placement are expected to be submitted within one (1) month from the date of this Announcement. 9. ADVISER AND PLACEMENT AGENT The Company has appointed AmInvestment Bank as the adviser and placement agent in relation to the Proposed Private Placement. 10. ESTIMATED TIMEFRAME FOR COMPLETION Barring any unforeseen circumstances, the Board expects the Proposed Private Placement to be completed by the second quarter of