NOVA MSC BERHAD
01 Aug 2017
The Board of Directors (“Board”) of Nova MSC Bhd (“the Company”) wishes to announce that the Company had today approved the issuance of convertible bonds of S$2,000,000 (“Issuance”) by its subsidiary company, CNA Development Pte Ltd, (“CNAD”) with the following salient points:-
|Type of Securities
|S$2,000,000 (approximately RM6.3 million) in aggregate principal amount, redeemable convertible bonds.
|Name of subscribers
|1. Huang Chu-Seng, Taiwan ROC Passport No. 30126909
2. Yu Jih-Hsu, Taiwan ROC Passport No. 305237192
(Collectively known as Bondholders)
|The date following Three (3) years after the date of issue of the bond
|Interest shall accrue on the Bond at the rate of three (3) per cent per annum on the Bond balance outstanding amount until all the Bonds are either fully converted or redeemed. Such interest shall accrue on the basis of the actual number of days elapsed and a 365-day year.
|Special Clause in the Bond Agreement
|a. Coversion Right:
Bondholders have the right to convert their bonds into CNAD shares during the Coversion Period and such conversion shall be in compliance with Bursa/SGX Exchange regulations, where applicable.
b. Conversion Period
Upon the Initial Public Offering of the CNAD after the date of issue of such Bond up to, and including, the close of business on the Maturity Date.
c. Conversion Price:
The price at which CNAD shares will be issued upon conversion of a Bond will be equal to 1:1.3, that is, the equivalent value of one and one-third Share for every one dollar value of Bond held.
For the aggregate principal value of the Bond of $2,000,000.00, the Bondholder will receive $2,600,000.00 equivalent shares in the CNAD.
Rationale for the Issuance
After due consideration of the various methods of fund raising, the Board and CNAD is of the view that the Issuance is the most ideal avenue to fulfil the immediate and future funding requirements of CNAD. The Issuance will enable the CNAD to raise additional funds at lower interest costs as compared to bank borrowings. The proceeds from the Issuance will be utilized in the CNAD’s working capital requirement, which include, amongst others, operating and administrative overheads, payment to sub-contractors and other professional services.
Financial Effect of the Issuance
The issuance will not have any effect to the issued and paid-up capital of the Company as well as its substantial shareholders’ shareholding and is not expected to have a material effect on the earning and net assets of the Company and the Group for the financial year ending 31 March 2018. The Issuance will increase the Group’s gearing ratio from 4% as at 31 March 2017 to 17%.
Highest Percentage Ratio
The highest percentage ratio is calculated based the proceeds from the Issuance of approximately RM6.3 million over the net asset of the Group for the latest audited consolidated financial statements of Company for financial year ended 31 March 2017 amounting RM48.6 million of 13.0%.
Save for the approval of the directors and shareholders of CNAD, the Proposed Issuance is not subjected to any other approvals including, the approval of the shareholders of the Company and any relevent regulatory authorities in Malaysia or Singapore.
Directors and Major Shareholder’ Interest
None of the other directors and/or major shareholders of the Company or persons connected to the directors and/or major shareholders of the Company have any interest, direct or indirect in the above transaction.
The Board, after having considered all aspects of the Issuance, including the basis and justification of arriving at the coupon rate, rationale, prospects, risk factors and financial effects, is of the opinion that the Issuance are in the best interest of the Company and the Group and the terms and conditions in the Bond subscription agreement are fair and reasonable.
This announcement is dated 1 August 2017.
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