Minetech's ICPS oversubscribed by 45.53%, raised RM17.48 million  

KUALA LUMPUR 16 Oct - Minetech's rights issue of irredeemable convertible preference shares (ICPS) has been oversubscribed by 45.53% over the total number of ICPS available under the rights issue of ICPS.

In a filing with Bursa Malaysia on Friday, the conglomerate led by Dato' (Dr) Ts. Awang Daud Awang Putera as it's Executive Chairman, said total valid acceptances and excess applications for 847,936,762 ICPS were received as at the closing date (October 8), representing 145.53% of the total 582,664,397 ICPS available for subscription.

The ICPS was issued at the price of RM0.03 per ICPS - on the basis of one ICPS for every two existing shares held by entitled shareholders.

Minetech's primary shareholders - Awang Daud, Choy Sen @ Chin Kim Sang and Chin Leong Choy had undertaken to collectively subscribed to approximately 256.20 million ICPS which raised proceeds of approximately RM7.69 million from the rights issue exercise. The total proceeds raised from the rights issue exercise was approximately RM17.48 million.

"Our board of directors deemed that the rights issues of ICPS, alongside the upcoming private placement of new Minetech shares to be the most appropriate avenue for us to raise the required funds without incurring interest costs associated with bank borrowings or through the issuance of debt instruments, hence minimising any potential cash outflow arising from interest servicing costs", expressed Awang Daud, adding that the decision was made after having evaluated various fund raising methods that best suited the company.

Minetech's rights issue of ICPS is part of a series of corporate exercises it mooted in March this year. Among others, the exercise also entails a share capital reduction (SCR), private placement, diversification, amendments to the company’s constitution and share issuance scheme.

"The SCR of RM90 million will see the corresponding credit arising from the reduction being used to reduce or eliminate accumulated losses. While the SCR will not result in any adjustment for the market price and number of Minetech shares held by shareholders, it will enhance Minetech credibility with customers, suppliers and investors", said the Executive Chairman.

Following the rights issue of ICPS, Minetech is also planning to undertake a private placement of up to 349,598,600 new Minetech Shares to be issued at a price to be determined later.

"We hope to raise approximately RM55.94 million from our private placement exercise, which will bring the total gross proceeds raised from our fundraising activities to RM73.42 million, which we will channel to fund expenditure for construction projects, repayment of borrowings, development cost for our solar power plant, future business investments and acquisitions, expansion of quarry division, diversifications into the oil & gas sectors, expansion of its bituminous products division and working capital", he said.

For the record, Minetech began life in 1977 as a drilling and blasting services company. Besides the traditional mining business, Minetech also specialises in manufacturing, civil engineering works, earthworks, road pavement projects as well as construction. business, Minetech also specialises in manufacturing, civil engineering works, earthworks, road pavement projects as well as construction.

Minetech was listed on Bursa Malaysia in 2005 and was given a new breath of life in 2020 when renown corporate figure and philanthropist, Awang Daud took over the helm as its Executive Chairman, where he implemented changes and transformation initiatives, particularly on corporate restructuring exercises, the introduction of a new management system and cost cutting measures across the board.

Minetech expects to achieve a meliorate operating margin this year through various diversifications into technology, renewable energy and innovation, as well as via penetration into second-tier construction activities, and is quite optimistic on its group performance in future, especially with the rollout of vaccines to achieve herd immunity and the allocation of funds for large infrastructure projects such as the MRT 3 in Klang Valley.

Minetech has today set a 5-year strategic direction, targeting EPCC, Energy, Quarry and Manufacturing while actively sourcing for other potential sustainable projects and businesses, such as the recent investments in solar energy and financial technology to ensure sustainable growth in future. These will be Minetech’s key focus areas that are expected to help improve its financial performance in the years to come.

Minetech’s wholly-owned subsidiary, Minetech Construction Sdn Bhd, had also earlier this year been registered as a Registered Solar Photovoltaic Investor (RPVI) with Sustainable Energy Development Authority Malaysia (SEDA).

“Renewable energy and the construction segment, are viable businesses that will continue to see growing demand, and we believe both industries can potentially contribute 25% or more to our annual net profit", he concluded. - DagangNews.com