Note:- (1) As at the LPD, the Company has the following convertible securities:- 216,529,570 outstanding ATS warrants 2014/2019 ( Warrants A );

Transcription

1 AT SYSTEMATIZATION BERHAD ( ATS OR THE COMPANY ) PROPOSED SHARE CONSOLIDATION 1. INTRODUCTION On behalf of the Board of Directors of ATS ( Board ), Mercury Securities Sdn Bhd ( Mercury Securities ) wishes to announce that the Company proposes to undertake a proposed consolidation of every three (3) ordinary shares in ATS ( ATS Shares or Shares ) into one (1) ATS Share ( Consolidated Share ) ( Proposed Share ). 2. DETAILS OF THE PROPOSED SHARE CONSOLIDATION The Proposed Share involves the consolidation of every three (3) ATS Shares into one (1) new ATS Share. As at 20 June 2017, being the latest practicable date prior to the date of this announcement ( LPD ), the issued share capital of the Company is RM29,545, comprising 952,721,260 ATS Shares. For illustration purposes, the 952,721,260 ATS Shares (assuming none of the outstanding Convertible Securities (1) are granted and/or exercised into new Shares) will be consolidated into 317,573,753 Consolidated Shares pursuant to the Proposed Share. Note:- (1) As at the LPD, the Company has the following convertible securities:- (i) (ii) (iii) 216,529,570 outstanding ATS warrants 2014/2019 ( Warrants A ); 216,530,315 outstanding ATS warrants 2016/2019 ( Warrants B ); and 129,918,100 options granted under the Company s share issuance scheme ( SIS ) ( SIS Options ) and up to 155,898,278 SIS Options which may be granted by the Company pursuant to the maximum allowable amount under the SIS. The Warrants A, Warrants B and SIS Options are collectively referred to as the Convertible Securities. The actual number of Consolidated Shares will be determined based on the issued share capital of the Company as at 5.00 p.m. on a date to be determined by the Board in their absolute discretion as they deem fit and announced later, in which the shareholders of the Company ( Shareholders ) who are registered in the Company s record of depositors are entitled to the Consolidated Shares under the Proposed Share ( Books Closure Date ), after taking into consideration any new ATS Shares that may be issued pursuant to the exercise of any outstanding Convertible Securities. The Proposed Share will result in an adjustment to the reference share price of ATS Shares listed and quoted on the ACE Market of Bursa Malaysia Securities Berhad ( Bursa Securities ). For illustration purposes, based on the last transacted market price of ATS Shares as at the LPD of RM0.04, the theoretical adjusted reference share price of ATS Shares upon completion of the Proposed Share is as follows:- No. of Shares Market / theoretical adjusted reference price per Share RM (1) Total value RM 000 As at the LPD 952,721, (Last transacted market price as at the LPD) 38,109 After the Proposed Share 317,573,753 (2) 0.12 (Theoretical adjusted reference share price after adjustment) 38,109 1

2 (1) The total value was arrived at by multiplying the number of Shares in issue as at the LPD with the market / theoretical adjusted reference price per Share. (2) The theoretical adjusted reference share price is arrived at based on the following formula:- Theoretical adjusted reference share price = Market price per Share x Number of Shares as at the LPD Number of Shares after the Proposed Share = 0.04 x 952,721, ,573,753 = 0.12 Following the above, the illustration based on shareholdings of 1,000 Shares is as follows:- Assumed no. of Shares Market / theoretical adjusted reference price per Share RM (1) Total value RM As at the LPD 1, (Last transacted market price as at the LPD) 40 After the Proposed Share 333 (2) 0.12 (Theoretical adjusted reference share price after adjustment) 40 (1) The total value was arrived at by multiplying the number of Shares held with the market / theoretical adjusted reference price per Share. (2) The theoretical adjusted reference share price is arrived at based on the following formula:- Theoretical adjusted reference share price = Market price per Share x Number of Shares as at the LPD Number of Shares after the Proposed Share = 0.04 x 1, = 0.12 [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 2

3 The Proposed Share will also result in an adjustment to the reference price of existing Warrants A and Warrants B. For illustration purposes, based on the last transacted market price of Warrants A and Warrants B up to the LPD of RM0.025 and RM0.025 respectively, the theoretical adjusted reference price of Warrants A and Warrants B upon completion of the Proposed Share is set out in the following table. Warrants A No. of Warrants A Market / theoretical adjusted reference price per Warrant A RM (1) Total value RM 000 As at the LPD 216,529, (Last transacted market price as at the LPD) 5,413 After the Proposed Share 72,176,523 (2) (Theoretical adjusted reference price after adjustment) 5,413 (1) The total value was arrived at by multiplying the number of Warrants A in issue as at the LPD with the market / theoretical adjusted reference price per Warrant A. (2) The theoretical adjusted reference price is arrived at based on the following formula:- Theoretical adjusted reference price = Market price per Warrant A x Number of Warrants A as at the LPD Number of Warrants A after the Proposed Share = x 216,529,570 72,176,523 = Warrants B No. of Warrants B Market / theoretical adjusted reference price per Warrant B RM (1) Total value RM 000 As at the LPD 216,530, (Last transacted market price as at the LPD) 5,413 After the Proposed Share 72,176,771 (2) (Theoretical adjusted reference price after adjustment) 5,413 (1) The total value was arrived at by multiplying the number of Warrants B in issue as at the LPD with the market / theoretical adjusted reference price per Warrant B. (2) The theoretical adjusted reference price is arrived at based on the following formula:- Theoretical adjusted reference price = Market price per Warrant B x Number of Warrants B as at the LPD Number of Warrants B after the Proposed Share = x 216,530,315 72,176,771 =

4 Based on the above illustration, the Proposed Share will increase the reference price per ATS Share, Warrants A and Warrants B but it will not have any impact on the total market value of these securities held by Shareholders and holders of Warrants A and Warrants B respectively. Fractional entitlements for the Shares arising from the Proposed Share shall be disregarded and dealt with by the Board in such manner at its absolute discretion as it may deem fit or expedient and in the best interest of the Company. 2.1 Ranking of the Consolidated Shares The Consolidated Shares shall rank pari passu in all respects with one another. 2.2 Suspension of trading of ATS Shares There will not be any suspension of trading of ATS Shares pursuant to the Proposed Share. 2.3 Listing date and notices of allotment The Consolidated Shares will be listed and quoted on the ACE Market of Bursa Securities on the next market day after the Books Closure Date. The notices of allotment will be issued and despatched to the entitled shareholders within four (4) market days after the listing and quotation of the Consolidated Shares on the ACE Market of Bursa Securities, or such other period as may be prescribed by Bursa Securities. 3. RATIONALE FOR THE PROPOSED SHARE CONSOLIDATION The Board is of the view that the higher trading price of the Consolidated Shares following the Proposed Share may increase the profile of the Company amongst investors and lead to more attention by research houses and fund managers. This may in turn increase market interest and activity in the Consolidated Shares, and render the Consolidated Shares more attractive to investors. As the Company has a large number of Shares in issue and a relatively low trading price range, the Board noted that a small movement in the Share price may result in high percentage movement in the Share price. The Proposed Share would lead to a reduction in the number of Shares available in the market and may reduce the magnitude of fluctuation of the Company s market capitalisation. Following the completion of the Proposed Share, the theoretical market price of each Share will increase by three (3) times and the total number of Shares in issue will be reduced by the corresponding ratio. Notwithstanding this, Shareholders should note that the Proposed Share is not expected to alter the total value of the Consolidated Shares held by them. Further, as the Proposed Share would lead to a reduction in the number of Shares available in the market, the Company will also benefit from easier management of smaller number of Shares. [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 4

5 4. EFFECTS OF THE PROPOSED SHARE CONSOLIDATION Minimum Scenario : Assuming none of the outstanding Convertible Securities are granted and/or exercised into new ATS Shares prior to the Proposed Share Maximum Scenario : Assuming all the outstanding Convertible Securities are granted and/or exercised into new ATS Shares prior to the Proposed Share 4.1 Share capital The pro forma effects of the Proposed Share on the issued share capital of the Company are as follows:- Minimum Scenario Maximum Scenario No. of Shares Share capital No. of Shares Share capital Issued share capital as at the LPD (1) 952,721,260 29,545, ,721,260 29,545,496 Arising from the full granting and/or exercise of the SIS Options ,816,378 (2) 12,731,836 Reversal of share options reserve upon full exercise of the SIS Options ,637,860 Arising from the full exercise of the outstanding Warrants A ,529,570 (3) 19,487,661 Arising from the full exercise of the outstanding Warrants B ,530,315 (4) 6,495,909 Reversal of warrants reserve upon full exercise of the outstanding Warrants A ,125,582 Reversal of warrants reserve upon full exercise of the outstanding Warrants B ,495,909 Enlarged issued share capital 952,721,260 29,545,496 1,671,597, ,520,253 Issued share capital after the Proposed Share 317,573,753 29,545, ,199, ,520,253 (1) Excluding any credit in the share premium and other capital reserves. (2) Based on the:- (i) (ii) exercise price of RM0.05 for the 129,918,100 SIS Options granted on 2 August 2016 which have yet to be exercised; and illustrative exercise price of RM0.04 (based on the five (5)-day volume weighted average market price ( VWAP ) of ATS Shares up to and including the LPD of RM less 10% discount and rounded up to the nearest Sen) for the 155,898,278 SIS Options which may be granted pursuant to the maximum allowable amount under the SIS. (3) Based on the exercise price of RM0.09 per Warrant A. (4) Based on the exercise price of RM0.03 per Warrant B. 5

6 4.2 Net assets ( NA ) and gearing The pro forma effects of the Proposed Share on the NA and gearing of ATS and its subsidiaries ( ATS Group or Group ) are as follows:- Minimum Scenario Group level (I) (II) Audited as at 29 February 2016 After subsequent events (2) After (I) and the Proposed Share (RM 000) (RM 000) (RM 000) Share capital 43,306 29,545 29,545 Reserves (1) (660) 41,911 41,791 Shareholders equity / NA 42,646 71,456 71,336 Non-controlling interest Total equity 42,731 71,541 71,421 No. of Shares in issue ( 000) 433, , ,574 NA per Share Total borrowings (RM 000) 10,750 10,750 10,750 Gearing ratio (times) (1) Reserves include share premium, share option reserve, warrant reserve, revaluation reserve and accumulated losses. (2) After adjusting for the following:- (i) reduction of the issued and paid-up share capital of the Company via cancellation of RM0.07 from the then existing par value of every ordinary share of RM0.10 each in the Company ( Par Value Reduction ) and reduction of the Company s entire share premium account ( Share Premium Reduction ) which were completed on 22 July 2016, which collectively gave rise to a total credit of RM41.08 million to set-off against the accumulated losses; (ii) granting of 18,069,900 and 111,848,200 SIS Options since 1 March 2016 up to the LPD with allocated fair values of RM and RM per SIS Option respectively; (iii) issuance of 433,060,630 new Shares at an issue price of RM0.06 each, 216,530,315 Warrants B with an allocated fair value of RM0.03 per Warrant B and additional 19,683,805 Warrants A as well as expenses of approximately RM584,000 arising from a rights issue exercise completed on 25 October 2016; and (iv) issuance of 86,600,000 new Shares at an issue price of RM each as well as expenses of approximately RM150,000 arising from a private placement exercise completed on 17 May (3) After deducting estimated expenses incidental to the Proposed Share of approximately RM120,000. 6

7 Maximum Scenario Group level (I) (II) (III) Audited as at 29 February 2016 After subsequent events (2) After (I) and assuming full exercise of Convertible Securities (3) After (II) and the Proposed Share (RM 000) (RM 000) (RM 000) (RM 000) Share capital 43,306 29, , ,520 Reserves (1) (660) 41,911 9,653 9,533 Shareholders equity / NA 42,646 71, , ,053 Non-controlling interest Total equity 42,731 71, , ,138 No. of Shares in issue ( 000) 433, ,721 1,671, ,199 NA per Share Total borrowings (RM 000) 10,750 10,750 10,750 10,750 Gearing ratio (times) (1) Reserves include share premium, share option reserve, warrant reserve, revaluation reserve and accumulated losses. (2) After adjusting for the following:- (i) Par Value Reduction and Share Premium Reduction which were completed on 22 July 2016, which collectively gave rise to a total credit of RM41.08 million to set-off against the accumulated losses; (ii) granting of 18,069,900 and 111,848,200 SIS Options since 1 March 2016 up to the LPD with allocated fair values of RM and RM per SIS Option respectively; (iii) issuance of 433,060,630 new Shares at an issue price of RM0.06 each, 216,530,315 Warrants B with an allocated fair value of RM0.03 per Warrant B and additional 19,683,805 Warrants A as well as expenses of approximately RM584,000 arising from a rights issue exercise completed on 25 October 2016; and (iv) issuance of 86,600,000 new Shares at an issue price of RM each as well as expenses of approximately RM150,000 arising from a private placement exercise completed on 17 May (3) Assuming all the Convertible Securities are granted and/or exercised into new Shares as follows:- (i) 216,529,570 Warrants A are exercised at the exercise price of RM0.09 per Warrant A; (ii) 216,530,315 Warrants B are exercised at the exercise price of RM0.03 per Warrant B; (iii) 129,918,100 SIS Options are exercised at the exercise price of RM0.05 per SIS Option; and (iv) 155,898,278 SIS Options which may be granted pursuant to the maximum allowable amount under the SIS are granted and exercised at an illustrative exercise price of RM0.04 (based on the five (5)-day VWAP of ATS Shares up to and including the LPD of RM less 10% discount and rounded up to the nearest Sen). (4) After deducting estimated expenses incidental to the Proposed Share of approximately RM120,000. 7

8 4.3 Substantial Shareholders shareholdings The Proposed Share will not have any effect on the percentage of the substantial Shareholders shareholdings in the Company. However, the number of Shares held by the substantial Shareholders in the Company will reduce proportionately as a result of the Proposed Share. The substantial shareholders of the Company based on the Register of Substantial Shareholders as at the LPD and the pro forma effects of the Proposed Share on their shareholdings are as follows:- Minimum Scenario Substantial Shareholders As at the LPD After the Proposed Share Direct Indirect Direct Indirect No. of Shares (1) % No. of Shares (1) % No. of Shares (2) % No. of Shares (2) % Asiabio Capital Sdn Bhd 162,831, ,277, Asia Bioenergy Technologies Berhad - - (3) 162,831,700 (3) (3) 54,277,233 (3) (1) Based on the issued share capital of 952,721,260 Shares. (2) Based on the issued share capital of 317,573,753 Consolidated Shares. (3) Deemed interest by virtue of its interest in Asiabio Capital Sdn Bhd. [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 8

9 Maximum Scenario Substantial Shareholders (I) (II) As at the LPD Assuming full exercise of Convertible Securities After (I) and after the Proposed Share Direct Indirect Direct Indirect Direct Indirect No. of Shares (1) % No. of Shares (1) % No. of Shares (2) % No. of Shares (2) % No. of Shares (3) % No. of Shares (3) % Asiabio Capital Sdn Bhd 162,831, ,831, ,277, Asia Bioenergy Technologies Berhad - - (4) 162,831,700 (4) (4) 162,831,700 (4) (4) 54,277,233 (4) 9.74 (1) Based on the issued share capital of 952,721,260 Shares. (2) Based on the enlarged issued share capital of 1,671,597,523 Shares. (3) Based on the issued share capital of 557,199,174 Consolidated Shares. (4) Deemed interest by virtue of its interest in Asiabio Capital Sdn Bhd. [THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 9

10 4.4 Earnings and EPS The Proposed Share will not have any effect on the consolidated earnings of the Group for the FYE 31 March The lower number of ATS Shares in issue upon completion of the Proposed Share will result in a corresponding increase in the EPS of the Group. 4.5 Convertible securities Save for the following, the Company does not have any other outstanding convertible securities as at the LPD SIS Options As at the LPD, there are 129,918,100 SIS Options which have been granted but unexercised as well as up to 155,898,278 SIS Options which may be granted by the Company pursuant to the maximum allowable amount under the SIS. Consequential to the Proposed Share, the exercise price and/or number of SIS Options which have been granted but unexercised prior to the Books Closure Date may be adjusted in accordance with the provisions of the By-Laws to ensure that the status of SIS Option holders is not prejudiced as a result of the Proposed Share Warrants A and Warrants B As at the LPD, there are 216,529,570 outstanding Warrants A and 216,530,315 outstanding Warrants B in the Company. Consequential to the Proposed Share, the exercise price and/or number of outstanding Warrants A and Warrants B may be adjusted in accordance with the provisions of the Deed Poll A and Deed Poll B to ensure that the status of the holders of Warrants A and Warrants B is not prejudiced as a result of the Proposed Share. Such adjustments will only be finalised on the Books Closure Date and will be effective on the next market day after the Books Closure Date. The holders of the existing Warrants A and Warrants B will be officially notified in due course on the effective adjustments arising from the Proposed Share. 5. TENTATIVE TIMELINE Subject to all relevant approvals being obtained, the Proposed Share is expected to be completed by the third quarter of APPROVALS REQUIRED The Proposed Share is subject to approvals being obtained from the following:- (i) (ii) (iii) Bursa Securities for the Proposed Share ; Shareholders at an extraordinary general meeting to be convened for the Proposed Share ; and any other relevant parties / authorities, if required. 10

11 7. INTER-CONDITIONALITY The Proposed Share is not conditional upon any other corporate exercise / scheme undertaken or to be undertaken by the Company. 8. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM None of the directors of the Company and/or major Shareholders and/or persons connected to them have any interest, direct or indirect, in the Proposed Share. 9. DIRECTORS STATEMENT The Board, having duly considered all aspects of the Proposed Share, including but not limited to the rationale and effects of the Proposed Share, is of the opinion that the Proposed Share is in the best interests of the Company. 10. APPLICATION TO THE AUTHORITIES The application in relation to the Proposed Share has been submitted to Bursa Securities on even date. 11. ADVISER Mercury Securities has been appointed by the Company to act as the Principal Adviser in relation to the Proposed Share. This announcement is dated 6 July