NOVA MSC BERHAD
24 Jan 2006
|Subject||NOVA MSC BERHAD (“NMSC” OR THE “COMPANY”)|
On behalf of the Board of Directors of NMSC, OSK Securities Berhad (“OSK”) wishes to announce that the Company proposes to implement a private placement of up to 32,303,500 new ordinary shares of RM0.10 each in NMSC (“Placement Shares”), representing not more than ten percent (10%) of the issued and paid-up share capital of the Company, to investors to be identified (“Proposed Private Placement”).Further details on the Proposed Private Placement are set out in the following sections.
- DETAILS OF THE PROPOSED PRIVATE PLACEMENT
The Proposed Private Placement will involve the issue of a maximum of 32,303,500 Placement Shares to investors that will be identified at a later stage. This figure was arrived at based on ten percent (10%) of the issued and paid-up share capital of NMSC as at 11 January 2006, and assuming the full exercise of options to subscribe for up to 42,135,000 new ordinary shares of RM0.10 each in NMSC (“Shares”) (“ESOS Options”) pursuant to an employee share option scheme (“ESOS”), prior to the price-fixing date of the Proposed Private Placement. The exact number of Placement Shares to be issued will depend on the share capital of NMSC as at the price-fixing date, which shall be determined after receipt of the approval of the Securities Commission (“SC”) on the Proposed Private Placement.The Placement Shares are proposed to be placed out to independent third parties who do not have any relationship with any of the directors or major shareholders of NMSC.
2.1 Basis of arriving at the issue price of the Placement Shares
The issue price of the Placement Shares will be determined and fixed by the Board of Directors of NMSC at a future date, which shall be determined after the receipt of the approval of the SC on the Proposed Private Placement. The Placement Shares will be issued at a discount of not more than five percent (5%) from the five (5) day weighted average market price of NMSC Shares immediately preceding the price-fixing date. In any case, the issue price of the Placement Shares will not be lower than the par value of NMSC Shares. For the purposes of this announcement, the issue price of the Placement Shares is indicatively fixed at RM0.10 per Share. The issue price of RM0.10 is equivalent to the par value of NMSC Shares and represents a premium of approximately 42.86% from the five (5) day weighted average market price of NMSC Shares as at 11 January 2006 of RM0.07.
2.2 Ranking of the Placement Shares
The Placement Shares shall, upon allotment and issue, rank pari passu in all respects with the existing Shares of the Company, save and except that the Placement Shares will not be entitled to any dividend, right, allotment and/or other distribution that may be declared, made or paid prior to the date of allotment of the said Placement Shares.
2.3 Utilisation of proceeds
Based on the indicative issue price of RM0.10 for each Placement Share, the Company is expected to raise up to RM3,230,350 from the Proposed Private Placement. The proceeds will be used to fund the NMSC Group’s working capital requirements in the manner set out in Table 1.
- The Proposed Private Placement will enable NMSC to raise funds without recurring interest costs, compared to bank borrowings. The funds raised will be utilised to fund the Group’s working capital requirements.
- FINANCIAL EFFECTS OF THE PROPOSALS
4.1 Share Capital
The pro forma effects of the Proposed Private Placement on the issued and paid-up share capital of NMSC are set out in Table 2.
4.2 Net Tangible Assets (“NTA”) and Gearing
Based on the unaudited consolidated balance sheets of the NMSC Group as at 30 September 2005, also taking into account the additional NMSC’s Shares that have been issued pursuant to the earlier placement exercise, and on the assumption that the Proposed Private Placement had been effected as at that date, the pro forma effects of the Proposed Private Placement on the NTA and gearing of the NMSC Group are out in Table 3.
The Proposed Private Placement is not expected to have any material effect on the earnings of the NMSC Group for the financial year ending 31 March 2006. Nevertheless, an increase in the issued and paid-up share capital may dilute the Company’s earnings per share in the future.
4.4 Major Shareholders’ Shareholdings
The effects of the Proposed Private Placement on the shareholdings of the major shareholders of NMSC as at 11 January 2006 are set out in Table 4 attached herewith.
The Board of NMSC does not expect to declare any dividend for the financial year ended 31 March 2006.Barring any unforeseen circumstances, any dividend to be declared by NMSC for the financial year ending 31 March 2006 will depend on, amongst others, the profitability and cashflow position of the NMSC Group. The Proposed Private Placement is not expected to have any material effect on the dividend policies of the Company.
- APPROVALS REQUIRED
The Proposals require the following approvals:-
(a) Securities Commission, for the Proposed Private Placement and for the Placement Shares to be issued pursuant to the Proposed Private Placement;
(b) Bursa Malaysia Securities Berhad, for the listing of and quotation for the Placement Shares to be issued pursuant to the Proposed Private Placement; and
(c) Any other relevant authority, if required.
- DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
None of the Directors or major shareholders of NMSC, and/or persons connected to them has any interest, whether direct or indirect, in the Proposed Private Placement.
- DIRECTORS’ RECOMMENDATION
After considering all aspects of the Proposed Private Placement, the Board of Directors of NMSC is of the opinion that the Proposed Private Placement is in the best interests of the NMSC Group.
- OSK has been appointed by NMSC to act as Adviser for the Proposed Private Placement.
- DEPARTURE FROM THE LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD FOR THE MESDAQ MARKET
- The Board of NMSC is not aware of any departure from the Listing Requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market in relation to the Proposed Private Placement.
- APPLICATION TO THE AUTHORITIES
- Barring unforeseen circumstances, the application to the SC on the Proposed Private Placement is expected to be made within a period of three (3) months from the date of this announcement.
This announcement is dated 24 January 2006.
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