PROPOSED PRIVATE PLACEMENT OF UP TO TEN PERCENT (10%) OF THE ISSUED SHARE CAPITAL OF IRIS ( PROPOSED PRIVATE PLACEMENT )

Transcription

1 IRIS CORPORATION BERHAD ( IRIS OR COMPANY ) PROPOSED PRIVATE PLACEMENT OF UP TO TEN PERCENT (10%) OF THE ISSUED SHARE CAPITAL OF IRIS ( PROPOSED PRIVATE PLACEMENT ) 1. INTRODUCTION On behalf of the Board of Directors of IRIS ( Board ), CIMB Investment Bank Berhad ( CIMB ) is pleased to announce that the Company proposes to undertake a proposed private placement of new ordinary shares in IRIS ( IRIS Shares or Shares ) ( Placement Shares ) of up to ten percent (10%) of the issued share capital of the Company. 2. DETAILS OF THE PROPOSED PRIVATE PLACEMENT 2.1 Size of the placement The Proposed Private Placement shall be up to ten percent (10%) of the issued share capital of the Company. Based on the issued share capital of the Company as at 25 May 2017, being the latest practicable date prior to this announcement ( LPD ), of 2,247,184,057 IRIS Shares, the size of the Proposed Private Placement will be up to 224,718,405 Placement Shares, representing 10% of the issued share capital of the Company. The Proposed Private Placement will be undertaken in accordance with the general mandate pursuant to Sections 75 and 76 of the Companies Act 2016 ( Act ) (previously Section 132D of the Companies Act 1965), the approval of which had been obtained from the shareholders of the Company at its last annual general meeting ( AGM ) convened on 1 September 2016 ( General Mandate ). 2.2 Placement arrangement The Placement Shares are intended to be placed to independent third party investor(s) to be identified later in accordance with Rule 6.05(c) of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) ( Listing Requirements ). The Placement Shares are not intended to be placed to the following parties: (a) (b) (c) a director, major shareholder or chief executive of IRIS or a holding company of IRIS (each an Interested Person ); a person connected with the Interested Person; and nominee corporations, unless the name of the ultimate beneficiaries are disclosed. Subject to the prevailing market conditions and timing of identification of the placee(s), the Proposed Private Placement may be implemented in one or more 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 approved by Bursa Securities, subject always to the expiry of the General Mandate or a new mandate being obtained from the shareholders of the Company, as the case may be. 1

2 2.3 Ranking of the Placement Shares The Placement Shares shall, upon allotment and issue, rank pari passu in all respects with the existing IRIS Shares save and except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to the date of allotment of the Placement Shares. 2.4 Listing of and quotation for the Placement Shares An application will be made to Bursa Securities for the listing of and quotation for the Placement Shares on the ACE Market of Bursa Securities. 2.5 Basis of determining the issue price of the Placement Shares The issue price of the Placement Shares shall be determined by the Board at a later date after the receipt of all relevant approvals for the Proposed Private Placement. The Placement Shares will not be priced at more than 10% discount to the five (5)-day volume weighted average market price ( VWAP ) of IRIS Shares immediately before the price-fixing date. 2.6 Utilisation of proceeds For illustrative purposes, based on an assumed issue price of RM0.1802, representing approximately 10% discount to the 5-day VWAP of IRIS Shares up to and including LPD of RM per Share, the Proposed Private Placement is expected to raise gross proceeds of up to approximately RM40.49 million. The proceeds from the Proposed Private Placement are expected to be utilised as set out below: Proposed utilisation of proceeds RM 000 Estimated timeframe for utilisation Within 12 months from the receipt Working capital and/or future business projects/investment (1) 40,358 of the proceeds of the Proposed Private Placement Estimated expenses (2) 136 Within 1 month Notes: 40,494 (1) The Company proposes to utilise up to RM40.36 million of the proceeds to be raised from the Proposed Private Placement to meet its working capital requirements and/or for future business projects/investments. The entire amount could be utilised for working capital purposes, which include amongst others, staff salaries and allowances, wages, general office expenses, statutory payments, payment of creditors, borrowings and other operating expenses. As at the date of this announcement, the new business projects/investments has not been determined. The Company shall make the requisite announcement, if required by the Listing Requirements, as and when the new business projects/investments are confirmed. Following thereto, the allocation between working capital and new business projects/investments has not been determined and is dependent on the operations, funding requirements of IRIS and its subsidiaries ( IRIS Group ) and investment opportunities as and when they arise. 2

3 Further, the actual utilisation for working capital may differ subject to investment opportunities, timing and operating cash flow requirements of IRIS Group. (2) Including amongst others, professional fees, placement fee and fees to relevant authorities. If the actual expenses related to the Proposed Private Placement differ from the estimated amount above, the excess/shortfall will be adjusted to working capital, future business payouts/future investment and vice versa. The actual proceeds of the Proposed Private Placement will be dependent on the number of Placement Shares and the issue price. Any difference between the proceeds as illustrated above and the actual proceeds raised shall be adjusted from/to the working capital, future business projects/investments of IRIS Group. 3. RATIONALE The Proposed Private Placement will enable IRIS to raise funds to meet its working capital requirements and to capitalize on future business projects/investments, as and when such opportunity arises, without incurring additional interest costs as compared to bank borrowings. After due consideration of the various funding options available to the Company, the Board is of the view that the Proposed Private Placement is the most appropriate avenue for the Company to raise funds as the Proposed Private Placement will: (i) (ii) (iii) enable the Company to raise funds expeditiously without relying entirely on equity funding from the existing shareholders of the Company as compared to a proportionate issuance of new Shares in a rights issue scenario, which would typically entail a longer implementation time and may prove to be challenging in terms of securing underwriting given current market conditions; allow the Company to raise funds without incurring interest costs or service principal repayments as compared to bank borrowings; and strengthen the financial position of the Company by virtue of an increase in the capital base of the Company. 4. EFFECTS OF THE PROPOSED PRIVATE PLACEMENT For illustrative purposes, the Placement Shares are assumed to be issued at an indicative issue price of RM0.1802, representing approximately 10% discount to the 5-day VWAP of IRIS Shares up to and including LPD of RM per Share. 4.1 Share capital The pro forma effect of the Proposed Private Placement on the share capital of the Company is as follows: No. of IRIS Shares RM 000 Issued share capital as at the LPD 2,247,184, ,078 To be issued pursuant to the Proposed 224,718,405 40,494 Private Placement Enlarged issued share capital 2,471,902, ,572 3

4 4.2 Substantial shareholders shareholdings The effects of the Proposed Private Placement on the shareholdings of the substantial shareholders of IRIS are set out below: Felda Investment Corporation Sdn Bhd The Federal Land Development Authority Third-party investors, pursuant to the Proposed Private Placement As at the LPD After the Proposed Private Placement Direct Indirect Direct Indirect No. of IRIS Shares No. of IRIS Shares No. of IRIS Shares No. of IRIS Shares 000 % 000 % 000 % 000 % 479, , , , , Note: (1) Deemed interest by virtue of Section 8 of the Act. 4

5 4.3 Net assets ( NA ), NA per share and gearing The pro forma effects of the Proposed Private Placement on the NA, NA per share and gearing of IRIS Group, based on the latest audited consolidated statement of financial position of IRIS Group as at 31 March 2016, are set out below: Audited as at 31 March 2016 Subsequent events (1) After the Proposed Private Placement RM 000 RM 000 RM 000 Share capital 311, , ,572 Share premium 105, ,738 (2) 111,602 Warrants reserves 8, Other reserves 31,725 31,725 31,725 Retained earnings 92,902 96,437 96,437 Shareholders equity/ NA 550, , ,336 Number of ordinary shares (000) 2,077,074 2,247,184 2,471,902 NA per share (sen) Total borrowings 274, , ,788 Gearing (times) (3) Notes: (1) Pursuant to: (i) subsequent exercise of 15,349,603 Warrants A and 104,760,740 Warrants B from 1 April 2016 up to the expiry of Warrants A and Warrants B in June 2016 and April 2016 respectively, and relevant adjustments pursuant to expiry of both warrants; and (ii) issuance of 50,000,000 new IRIS Shares which were listed on 9 May 2016 pursuant to previous private placement exercise. (2) After deducting estimated expenses of RM136,000 for the Proposed Private Placement. (3) Computed based on total borrowings divided by NA. 4.4 Earnings and earnings per share ( EPS ) The Proposed Private Placement is not expected to have a material impact on the earnings of the IRIS Group for the financial year ending 31 March The EPS shall be diluted accordingly as a result of the increase in the number of IRIS Shares issued pursuant to the Proposed Private Placement. However, the Proposed Private Placement is expected to contribute positively to the consolidated earnings of IRIS for the ensuing financial years as and when the benefits of the proposed utilisation of proceeds as detailed in Section 2.6 above are realised. 4.5 Convertible securities As at the date of this announcement, the Company does not have any convertible securities. 5

6 5. APPROVALS REQUIRED The Proposed Private Placement is conditional upon the following approvals being obtained: (a) (b) Bursa Securities for the listing of and quotation for the Placement Shares on the ACE Market of Bursa Securities; and the approval/consent of any other relevant authorities/parties, if required. The Board intends to allot and issue the Placement Shares under the General Mandate. As the Placement Shares will be issued under the General Mandate, the Proposed Private Placement does not require the approval by the shareholders of the Company. However, if the Placement Shares are not offered to third-party investors before the expiry of the General Mandate, the offering of such Placement Shares will be conditional upon the General Mandate being renewed at the next AGM of the Company. The Proposed Private Placement is not conditional upon any other proposal undertaken or to be undertaken by the Company. 6. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED WITH THEM None of the Directors and/or major shareholders of IRIS and/or persons connected with them have any interests, direct or indirect, in the Proposed Private Placement. 7. DIRECTORS STATEMENT The Board, having considered all aspects to the Proposed Private Placement (including, but not limited to, the rationale for, and financial effects of, the Proposed Placement to the IRIS Group), is of the opinion that the Proposed Private Placement is in the best interest of the Company. 8. ADVISER AND PLACEMENT AGENT CIMB has been appointed as the Principal Adviser and Placement Agent for the Proposed Private Placement. 9. ESTIMATED TIMEFRAME FOR COMPLETION Barring any unforeseen circumstances and subject to the receipt of all requisite approvals from the relevant authorities, the Proposed Private Placement is expected to be completed by the second quarter of This announcement is dated 29 May