ALUMINIUM COMPANY OF MALAYSIA BERHAD ( ALCOM OR THE COMPANY ) PROPOSED CAPITAL REDUCTION AND REPAYMENT OF UP TO APPROXIMATELY RM43.

Transcription

1 ALUMINIUM COMPANY OF MALAYSIA BERHAD ( ALCOM OR THE COMPANY ) PROPOSED CAPITAL REDUCTION AND REPAYMENT OF UP TO APPROXIMATELY RM43.0 MILLION 1. INTRODUCTION On behalf of the Board of Directors of Alcom ( Board ), AmInvestment Bank Berhad ( AmInvestment Bank ) wishes to announce that Alcom proposes to undertake a proposed capital reduction and repayment to the shareholders of Alcom of up to RM42,985, on the basis of RM0.32 for each ordinary share in Alcom ( Alcom Share or Share ) held, via a reduction of the share capital of Alcom pursuant to Section 116 of the Companies Act, 2016 ( Act ) ( Proposed Capital Repayment ). 2. DETAILS OF THE PROPOSED CAPITAL REPAYMENT The Proposed Capital Repayment involves a capital reduction and repayment pursuant to Section 116 of the Act to cancel the Company's share capital by up to RM42,985, whereby the Company s share capital shall reduce from RM142,443,933 to between RM99,458, and RM100,123,341.64, which will be distributed to the shareholders of the Company whose names appear in the Company s Record of Depositors on an entitlement date which will be determined by the Board and announced at a later date, by way of cash distribution of RM0.32 for each issued Share. The final total distribution amount under the Proposed Capital Repayment is dependent on the total number of issued Alcom Shares less treasury shares as at the entitlement date. For illustration purpose, based on 2,079,000 treasury shares held by Alcom as at 7 April 2017, being the latest practicable date prior to the date of this Announcement ( LPD ), the total number of Alcom Shares that will be subject to the Proposed Capital Repayment is 132,251,848, translating to a total distribution amount of RM42,320, Alcom intends to fund the Proposed Capital Repayment through external borrowings. The Proposed Capital Repayment is to be implemented via a reduction of the share capital of Alcom in accordance with Section 116 of the Act. The Proposed Capital Repayment will not result in:- (a) a cancellation of Alcom Shares; (b) a change in the number of Alcom Shares held by any shareholder of Alcom; and (c) a change in the proportion of Alcom Shares held by any shareholder of Alcom. Each shareholder will hold the same number of Alcom Shares before and immediately after the completion of the Proposed Capital Repayment. The effective date of the Proposed Capital Repayment will be the date on which the sealed copy of the order by the High Court of Malaya confirming the Proposed Capital Repayment is lodged with the Companies Commission of Malaysia. 1

2 3. RATIONALE FOR THE PROPOSED CAPITAL REPAYMENT The Proposed Capital Repayment forms part of Alcom s capital management strategy which seeks to achieve a more efficient capital structure. After taking into consideration the current financial standing (including its cash and cash equivalents reserves and zero gearing), future financial obligations and operational requirements of Alcom and its subsidiary ( Alcom Group ), the Board proposes to undertake the Proposed Capital Repayment which is also intended to reward the shareholders of Alcom for their continuous support towards Alcom Group. 4. EFFECTS OF THE PROPOSED CAPITAL REPAYMENT For illustrative purposes, the pro forma effects of the Proposed Capital Repayment are set out based on the following scenarios:- Minimum Scenario Assuming none of the 2,079,000 treasury shares are sold in the market before the entitlement date for the Proposed Capital Repayment. Maximum Scenario Assuming all of the 2,079,000 treasury shares are sold in the market before the entitlement date for the Proposed Capital Repayment. 2

3 4.1 Share Capital and Number of Shares The pro forma effects of the Proposed Capital Repayment on the share capital of Alcom and the number of Alcom Shares in issue are set out below:- Minimum Scenario Maximum Scenario No. of Shares Share Capital No. of Shares Share Capital 000 RM RM 000 As at the LPD 132, , , ,444 Assuming all the treasury shares as at the LPD are sold in the market before the entitlement date for the Proposed Capital Repayment (for purpose of the Maximum Scenario) - - 2, , , , ,444 Reduction of share capital pursuant to the Proposed Capital Repayment Upon completion of the Proposed Capital Repayment - (42,321) - (42,986) 132, , ,331 99,458 Notes:- Number of Shares excludes treasury shares. Upon commencement of Section 74 of the Act, any amount standing to the credit of a company s share premium account and capital redemption reserve shall become part of the company s share capital. Alcom s share premium of approximately RM4.1 million and capital redemption reserve of RM4.0 million are included within the share capital stated in the above table. 4.2 Substantial Shareholders Shareholdings The Proposed Capital Repayment will not have any effect on the substantial shareholders shareholdings in Alcom. 3

4 4.3 Earnings per Share The additional interest expense incurred on borrowings required to fund the Proposed Capital Repayment is expected to reduce Alcom Group s earnings and earnings per Alcom Share for the 9-month financial period ending 31 December Net Assets ( NA ) per Share and Gearing For illustrative purposes, the pro forma effects of the Proposed Capital Repayment on the consolidated NA and gearing of Alcom based on the audited consolidated statements of financial position of Alcom as at 31 March 2016 and assuming the Proposed Capital Repayment had been effected on that date, are set out below:- (a) Minimum Scenario Audited as at 31 March 2016 RM 000 After the Proposed Capital Repayment RM 000 Share capital 142, ,123 Treasury shares (2,330) (2,330) Retained earnings 24,450 23,450 Shareholders funds / NA 164, ,243 No. of Shares in issue ( 000) 132, ,252 NA per Share (RM) Total borrowings (RM 000) - 42,321 Gearing (times) Notes:- Upon commencement of Section 74 of the Act, any amount standing to the credit of a company s share premium account and capital redemption reserve shall become part of the company s share capital. Alcom s share premium of approximately RM4.1 million and capital redemption reserve of RM4.0 million are included within the share capital stated in the above table. After deducting estimated expenses for the Proposed Capital Repayment of RM1.0 million. Number of Shares in issue excludes 2,079,000 treasury shares. 4

5 (b) Maximum Scenario Audited as at 31 March 2016 Assuming Sale of 2,079,000 Treasury Shares After the Proposed Capital Repayment RM 000 RM 000 RM 000 Share capital 142, ,444 99,458 Treasury shares (2,330) - - Retained earnings 24,450 24,450 23,450 Shareholders funds / NA 164, , ,908 No. of Shares in issue ( 000) (4) 132, , ,331 NA per Share (RM) Total borrowings (RM 000) ,986 Gearing (times) Notes:- It is assumed that the treasury shares are sold in the open market at the same price as the average purchase price of the treasury shares of RM1.12 per Alcom Share. Upon commencement of Section 74 of the Act, any amount standing to the credit of a company s share premium account and capital redemption reserve shall become part of the company s share capital. Alcom s share premium of approximately RM4.1 million and capital redemption reserve of RM4.0 million are included within the share capital stated in the above table. After deducting estimated expenses for the Proposed Capital Repayment of RM1.0 million. (4) Number of Shares in issue excludes 2,079,000 treasury shares. 4.5 Adjustment to the market price of Alcom Shares There will be an adjustment to the market price of Alcom Shares on the ex-date for the Proposed Capital Repayment. For illustration purposes and based on the closing market price of Alcom Shares as at the LPD of RM1.12, the market price of Alcom Shares will be adjusted to RM

6 5. APPROVALS REQUIRED AND CONDITIONALITY The Proposed Capital Repayment is subject to the following approvals being obtained:- (i) (ii) (iii) approval of the shareholders of Alcom at an extraordinary general meeting to be convened; sanction of the High Court of Malaya pursuant to Section 116 of the Act; and approval or consent of any other relevant regulatory authorities and/or parties, if applicable. The Proposed Capital Repayment is not conditional upon any other corporate exercise/scheme of Alcom. 6. INTEREST OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM None of the Directors and/or major shareholders of Alcom and/or persons connected with them has any interest, either direct or indirect, in the Proposed Capital Repayment beyond their respective entitlements under the Proposed Capital Repayment for which all shareholders of Alcom are similarly entitled to. 7. DIRECTORS STATEMENT After due deliberation and taking into consideration all aspects of the Proposed Capital Repayment including but not limited to the rationale and the effects of the Proposed Capital Repayment, the Board is of the opinion that the Proposed Capital Repayment is in the best interests of Alcom. 8. ADVISER AmInvestment Bank has been appointed by Alcom as the Principal Adviser to Alcom for the Proposed Capital Repayment. 9. ESTIMATED TIME FRAME FOR COMPLETION Subject to the required approvals being obtained and barring any unforeseen circumstances, the Proposed Capital Repayment is expected to be completed in the 3rd quarter of the calendar year This Announcement is dated 12 April