Further details of the Proposed Free Warrants Issue are set out in ensuing sections.

Transcription

1 DATASONIC GROUP BERHAD ( DATASONIC OR COMPANY ) PROPOSED ISSUANCE OF 675,000,000 FREE WARRANTS IN DATASONIC ON THE BASIS OF ONE (1) FREE WARRANT FOR EVERY TWO (2) EXISTING ORDINARY SHARES IN DATASONIC HELD ON AN ENTITLEMENT DATE TO BE DETERMINED LATER 1. INTRODUCTION On behalf of the Board of Directors of Datasonic ( Board ), RHB Investment Bank Berhad ( RHB Investment Bank ) wishes to announce that the Company proposes to undertake an issuance of 675,000,000 free warrants ( Warrants ) in Datasonic on the basis of one (1) Warrant for every two (2) existing ordinary shares in Datasonic ( Datasonic Shares or Shares ) held on an entitlement date to be determined later ( Entitlement Date ) ( Proposed Free Warrants Issue ). Further details of the Proposed Free Warrants Issue are set out in ensuing sections. 2. DETAILS OF THE PROPOSED FREE WARRANTS ISSUE 2.1 Basis and number of Warrants to be issued The Proposed Free Warrants Issue will entail the issuance of 675,000,000 Warrants on the basis of one (1) Warrant for every two (2) existing Datasonic Shares held by the entitled shareholders of the Company whose names appear on the Record of Depositors of the Company on the Entitlement Date ( Entitled Shareholders ). As at 2 April 2018, being the latest practicable date prior to the date of this Announcement ( LPD ), the issued share capital of Datasonic is RM135,000,000 comprising 1,350,000,000 Datasonic Shares. Fractional entitlements arising from the Proposed Free Warrants Issue, if any, will be disregarded and dealt with in such manner as the Board in its absolute discretion deems fit and expedient or in the best interest of the Company. The Proposed Free Warrants Issue will be implemented in a single issuance. The Warrants will be issued in registered form and constituted by a deed poll to be executed by the Company ( Deed Poll ). The indicative salient terms of the Warrants are set out in Appendix I of this Announcement. 2.2 Basis of determining the exercise price of the Warrants The Warrants will be issued at no cost to the Entitled Shareholders. The exercise price of the Warrants will be determined and announced by the Board at a later date, after obtaining all relevant approvals (as set out in Section 6 of this Announcement) but before the Entitlement Date. The exercise price of the Warrants will be determined by the Board after taking into consideration, among others, the following:- (i) (ii) (iii) (iv) the historical trading prices of Datasonic Shares; the prevailing market conditions; the future prospects of Datasonic and its subsidiaries ( Group ); and a premium of not less than 15% to the theoretical ex-price of Datasonic Shares. 1

2 2.3 Ranking of the new Shares to be issued upon the exercise of the Warrants The holders of the Warrants will not be entitled to any voting rights or participate in any form of distribution, other than on winding up, compromise or arrangement of the Company as set out in the Deed Poll, and/or offer of further securities in the Company, until and unless such holders of the Warrants exercise their Warrants into new Shares. The new Shares to be issued and allotted upon the exercise of the Warrants shall rank equally in all respects with the existing Shares, save and except that they will not be entitled to any dividends, rights, allotments and/or any other distributions which may be declared, made or paid to the shareholders of the Company, for which the entitlement date is prior to the date of allotment of the new Shares issued pursuant to the exercise of the Warrants. 2.4 Listing of and quotation for the Warrants and the new Shares to be issued upon the exercise of the Warrants An application will be made to Bursa Malaysia Securities Berhad ( Bursa Securities ) for the admission of the Warrants to the official list of Bursa Securities ( Official List ) as well as the listing of and quotation for the Warrants and the new Shares to be issued upon the exercise of the Warrants on the Main Market of Bursa Securities. 3. UTILISATION OF PROCEEDS The Proposed Free Warrants Issue will not raise any immediate funds as the Warrants will be issued at no cost to the Entitled Shareholders. The gross proceeds to be raised by the Company pursuant to the exercise of the Warrants would depend on the actual number of the Warrants exercised during the exercise period of the Warrants. As such, the exact timeframe and manner of utilisation of the proceeds cannot be determined at this juncture. Solely for illustrative purposes throughout this Announcement, the exercise price for the Warrants is assumed to be RM1.01 per Warrant. This represents a premium of approximately 16.07% to the five (5) day volume weighted average market price of Datasonic Shares up to and including the LPD, of RM In this regard and in the event the Warrants are fully exercised, the Company will raise gross proceeds of approximately RM million. The gross proceeds to be raised, as and when the Warrants are exercised, are expected to be utilised to fund the future working capital requirements of the Group, which may include business development activities, project expenditures and other operating expenditures, depending on the Group s funding requirements at the time of utilisation. Proceeds that are not immediately utilised will be placed in deposits with financial institutions and/or short term money market instruments. The rest of this page is intentionally left blank 2

3 4. RATIONALE FOR THE PROPOSED FREE WARRANTS ISSUE The Proposed Free Warrants Issue is intended to:- (i) (ii) (iii) reward the Company s shareholders for their continuous support by enabling them to own convertible securities of the Company which are tradable on Bursa Securities, without incurring any cost; provide an opportunity for the Company s shareholders to increase their equity participation in the Company through the exercise of the Warrants at a pre-determined price during the exercise period of the Warrants; and strengthen the Company s capital base and provide the Group with additional working capital as and when the Warrants are exercised. 5. FINANCIAL EFFECTS OF THE PROPOSED FREE WARRANTS ISSUE For illustrative purposes, the pro forma financial effects of the Proposed Free Warrants Issue on the Company s total issued share capital, consolidated net asset ( NA ) per Datasonic Share and gearing and consolidated earnings as well as earnings per share ( EPS ) are as set out below:- 5.1 Share capital The Proposed Free Warrants Issue will not have any immediate effect on the total share capital of the Company until such time the Warrants are exercised. The pro forma effects arising from the exercise of the Warrants on the total issued share capital of the Company are set out below:- Shares RM ( 000) ( 000) As at LPD 1,350, ,000 To be issued pursuant to the full exercise of the Warrants 675, ,750 (1) Enlarged issued share capital 2,025, ,750 Note:- (1) Based on the indicative exercise price of RM1.01 per Warrant. The rest of this page is intentionally left blank 3

4 5.2 NA per Share and gearing Based on the latest audited consolidated statement of financial position of Datasonic as at the financial year ended ( FYE ) 31 March 2017, the pro forma effects of the Proposed Free Warrants Issue on the consolidated NA per Share and gearing of the Group are as follows:- (I) (II) (III) Audited as at 31 March 2017 After adjusting for events after 31 March 2017 up to LPD (3) After (I) and the Proposed Free Warrants Issue After (II) and the full exercise of the Warrants (RM 000) (RM 000) (RM 000) (RM 000) Share capital 135, , , ,750 (5) Merger deficit (11,072) (11,072) (11,072) (11,072) Foreign exchange translation reserve Retained profits 136,846 76,096 (3) 75,796 (4) 75,796 NA/Shareholders funds 260, , , ,484 Number of Datasonic Shares 1,350,000 1,350,000 1,350,000 2,025,000 ( 000) NA per Datasonic Share (RM) (1) Interest-bearing borrowings 156, , , ,889 Gearing (times) (2) Notes:- (1) Calculated based on NA over the number of Datasonic Shares in issue. (2) Calculated based on total interest-bearing borrowings over NA. (3) For the FYE 31 March 2017, the Board had on 25 May 2017 declared a fourth interim single tier tax-exempt dividend of RM0.015 per Share, amounting to RM20.25 million. Further, the Board had on 25 August 2017, 24 November 2017 and 28 February 2018, declared interim single tier tax-exempt dividends of RM0.01 per Share respectively for the FYE 31 March 2018, amounting to RM40.50 million. Total dividend paid amounted to RM60.75 million. (4) After deducting the estimated expenses relating to the Proposed Free Warrants Issue of approximately RM0.30 million which comprises of professional fees, fees payable to authorities, printing costs, costs to convene an extraordinary general meeting ( EGM ) and other miscellaneous expenses to be incurred in relation to the Proposed Free Warrants Issue. (5) Based on the illustrative exercise price of RM1.01 per Warrant. The rest of this page is intentionally left blank 4

5 5.3 Substantial shareholders shareholdings Based on the Company s register of substantial shareholders as at LPD, the pro forma effects of the Proposed Free Warrants Issue on the shareholdings of the substantial shareholders of the Company are as follows:- (I) As at LPD After the Proposed Free Warrants Issue < Direct > < Indirect > < Direct > < Indirect > Datuk Haji Abu Hanifah bin Noordin ( DHN ) Datin Popi Riandani binti Dody Muchtar ( DPR ) 204,292, ,742,010 (1) ,292, ,742,010 (1) ,970, ,660,000 (2) ,970, ,660,000 (2) 9.68 Gerbang Subur Sdn Bhd ( GSSB ) 130,660, ,660, Chew Ben Ben ( CBB ) 183,915, ,150,000 (3) ,915, ,150,000 (3) Enrich Epitome Sdn Bhd ( EESB ) 130,250, ,250, Lembaga Tabung Haji ( LTH ) 128,143, ,143, (II) After (I) and the full exercise of the Warrants < Direct > < Indirect > DHN 306,438, ,113,015 (1) DPR 64,455, ,990,000 (2) 9.68 GSSB 195,990, CBB 275,872, ,725,000 (3) EESB 195,375, LTH 192,215,

6 Notes:- (1) Deemed interest through his substantial shareholdings in Dibena Enterprise Sdn Bhd and GSSB pursuant to Section 8 of the Companies Act, 2016 ("Act ) and shares held by his spouse, DPR, and his son, Harrizal Rizhan bin Abu Hanifah, pursuant to Section 59(11)(c) of the Act. (2) Deemed interest through her substantial shareholding in GSSB pursuant to Section 8 of the Act. (3) Deemed interest through his substantial shareholding in EESB pursuant to Section 8 of the Act and shares held by his spouse, Madam Zhao Tong pursuant to Section 59(11)(c) of the Act. The rest of this page is intentionally left blank 6

7 5.4 Earnings and EPS The Proposed Free Warrants Issue is not expected to have any material effect on the earnings and EPS of the Group for the FYE 31 March 2018 had the Proposed Free Warrants Issue been effected during the financial year. The potential effect of any exercise of the Warrants on the Group s EPS would depend on, among others, the number of Warrants exercised at any point in time and the returns generated by the Group from the utilisation of proceeds arising from the exercise of the Warrants. Although the Group s EPS may be diluted as a result of the increase in the number of Shares as and when the Warrants are exercised, the utilisation of proceeds arising therefrom is expected to contribute positively to the Group s earnings. 5.5 Convertible securities As at LPD, Datasonic does not have any outstanding convertible security. 6. APPROVALS REQUIRED The Proposed Free Warrants Issue is subject to the following approvals being obtained:- (i) Bursa Securities for the following:- (a) (b) admission of the Warrants to the Official List; and the listing of and quotation for the Warrants as well as the new Shares to be issued upon the exercise of the Warrants on the Main Market of Bursa Securities; (ii) (iii) the shareholders of Datasonic at an EGM to be convened; and any other relevant authority/party, if required. The Proposed Free Warrants Issue is not conditional upon any other proposal undertaken or to be undertaken by the Company. 7. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM None of the Directors, major shareholders and/or persons connected with the Directors and major shareholders has any interest, direct or indirect, in the Proposed Free Warrants Issue save for their respective entitlements as shareholders under the Proposed Free Warrants Issue, which is also available to all other shareholders of the Company. 8. DIRECTORS STATEMENT The Board, having considered all aspects of the Proposed Free Warrants Issue including the rationale and financial effects of the Proposed Free Warrants Issue, is of the opinion that the Proposed Free Warrants Issue is in the best interest of the Company and the shareholders of the Company. 7

8 9. ADVISER RHB Investment Bank has been appointed as the Principal Adviser for the Proposed Free Warrants Issue. 10. ESTIMATED TIMEFRAME FOR COMPLETION Barring unforeseen circumstances, the Proposed Free Warrants Issue is expected to be completed by the second (2 nd ) quarter of APPLICATION TO THE AUTHORITY Barring unforeseen circumstances, the application to Bursa Securities in relation to the Proposed Free Warrants Issue will be made within one (1) month from the date of this Announcement. This Announcement is dated 11 April

9 APPENDIX I INDICATIVE SALIENT TERMS OF WARRANTS The indicative salient terms of the Warrants to be issued pursuant to the Proposed Free Warrants Issue are as follows:- Issue size and basis of allotment : 675,000,000 Warrants on the basis of one (1) Warrant for every two (2) Datasonic Shares held at the Entitlement Date. Form : The Warrants will be issued in registered form and constituted by the Deed Poll. Tenure : Five (5) years commencing from and including the date of the issue of the Warrants. Exercise Period : The Warrants may be exercised at any time during the period commencing on, and inclusive of, the date of issue and ending at 5.00 pm on the Expiry Date, provided that if such day falls on a day which is not a market day, then it shall be the market day immediately preceding the said non-market day. Any Warrants not exercised during the exercise period will thereafter lapse and cease to be valid. Exercise Price : The exercise price of the Warrants will be determined and announced at a later date by the Board after obtaining the relevant approvals but before the Entitlement Date. Exercise Rights : Each Warrant entitles the Warrant holders to subscribe for one (1) Datasonic Share at the Exercise Price at any time during the Exercise Period, subject to the adjustments in accordance with the provisions of the Deed Poll. Expiry Date : The day falling immediately before the fifth (5 th ) anniversary of the date of issue of the Warrants. Mode of Exercise : The Warrant holders are required to lodge an exercise form with the Company s registrar, duly completed and signed together with payment of the Exercise Price via banker s draft or cashier s order drawn on a bank operating in Malaysia. Rights of the Warrants holders : The Warrant holders shall not be entitled to any voting rights or to participate in any form of distribution other than on winding up, compromise or arrangement of the Company as set out in the Deed Poll, and/or offer of further securities in the Company until and unless such Warrant holders exercise their Warrants into new Datasonic Shares. Board Lot : For the purpose of trading on Bursa Securities, one (1) board lot of the Warrants shall comprise one hundred (100) Warrants, or such other denomination as determined by Bursa Securities. Modification : Any modification to the Deed Poll may be effected only by a further deed poll, executed by the Company and expressed to be supplemental to this Deed Poll and subject to the requirements on modification of rights set out in the Deed Poll being complied with. Any such modification shall however be subject to the approval of Bursa Securities and/or any other relevant authorities where required. A memorandum of every such supplemental deed shall be endorsed on the Deed Poll. Adjustment in the Exercise Price and/or the number of Warrants : The relevant Exercise Price and number of unexercised Warrants shall from time to time be adjusted by the Directors in consultation with the Principal Adviser and certified by the external auditors of the Company in accordance with the provisions of the Deed Poll in the event of alteration to the share capital of the Company during the tenure of the Warrants. 9

10 APPENDIX I INDICATIVE SALIENT TERMS OF WARRANTS (Cont d) Transferability : The Warrants will only be transferable in accordance with the provisions of the Deed Poll subject always to the provisions of Securities Industry (Central Depositories) Act 1991 and the rules of Bursa Depository Sdn Bhd. Rights in the event of winding up, liquidation, compromise and/ or arrangement : Where a resolution has been passed for a members voluntary winding up of the Company or where there is a compromise or arrangement, whether or not for the purpose of or in connection with a scheme for the reconstruction of the Company or the amalgamation of the Company with one (1) or more companies, then: (i) for the purpose of such winding up, compromise or arrangement (other than a consolidation, amalgamation or merger in which the Company is the continuing corporation) to which the Warrant holders, or some persons designated by them for such purposes by a Special Resolution, are to be a party, the terms of such winding up, compromise or arrangement shall be binding on all the Warrant holders; and (ii) in any other case, every Warrant holder shall be entitled upon and subject to the conditions at any time within six (6) weeks after the passing of such resolution for a members voluntary winding up of the Company or the granting of the court order approving the compromise or arrangement (as the case may be), by irrevocable surrender of his Warrants together with payment of the relevant Exercise Price, to elect to be treated as if he had immediately prior to the commencement of such winding-up, compromise or arrangement, exercised the subscription rights represented by such Warrants to the extent specified in the exercise notice and be entitled to receive out of the assets of the Company which would be available in liquidation if he had on such date been the holder of the new Datasonic Shares to which he would have become entitled pursuant to such exercise; and the liquidator of the Company shall give effect to such election accordingly. Subject to the above, if the Company is wound up, all Exercise Rights which have not been exercised within six (6) weeks of the passing of such resolution shall lapse and the Warrants will cease to be valid for any purpose. Listing status : An application will be made to Bursa Securities for the admission of the Warrants to the Official List and listing of and quotation for the Warrants and such new Datasonic Shares to be issued upon exercise of the Warrants on the Main Market of Bursa Securities. Governing law : Laws and regulations of Malaysia. The rest of this page is intentionally left blank 10